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Feds look to hammer food-stamp fraudsters

The owners Sunset Food Market Waukegan allegedly defrauded federal food stamp program. | Ryan Pagelow~Sun-Times Media

The owners of Sunset Food Market in Waukegan allegedly defrauded the federal food stamp program. | Ryan Pagelow~Sun-Times Media

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 PDF: The Saleh complaint

Updated: January 8, 2013 6:22AM

Saying a Waukegan storeowner and his wife used the federal food-stamp program as a “personal ATM machine,” prosecutors are trying to hammer the couple with sentences of at least 2½ years in prison.

Khaled Saleh and his wife, Fatima, have pleaded guilty to stealing more than $844,000 from the program between August 2009 and April 2011.

A sentence of 30 to 37 months in prison could send a message to other thieving storeowners that ripping off the food-stamp program is a bad idea, prosecutors say.

“This case demonstrates that causing even one store to rethink committing fraud could result in more than $844,000 worth of food stamps and WIC benefits being spent on their intended purpose as opposed to being lost to fraud,” Assistant U.S. Attorney Andrew DeVooght said in a memo for the couple’s sentencing Wednesday.

Cook County Sheriff Tom Dart and other public officials have expressed frustration about the rampant fraud in the food-stamp program.

Dart’s office participated in the busts of five other suburban stores last year for similar crimes. But he’s directed his resources toward fighting over types of crime because those investigations didn’t seem to deter other stores from food-stamp scams, a spokesman said.

The problem is taking on greater importance for the federal government because the program’s benefit payments have skyrocketed as the economy stumbled in recent years. More than $71 billion in benefits were paid last year, compared to $34 billion in 2008.

Thousands of times, the Salehs illegally provided cash to customers who made fake purchases with LINK food-stamps and nutrition coupons.

The store owners typically provided customers with 50 cents for every dollar in redeemed benefits — and kept the rest as illegal profit, prosecutors said.

The Salehs also purchased infant formula and other products from customers who bought the items at other stores with their federal nutrition benefits. The couple paid half price for the items, then resold them at higher prices, authorities said.

On Sept. 9, 2010, an undercover federal agent visited the store and said to Khaled Saleh: “You know I was going to ask you, when I was in Rockford, I was able to get a couple of dollars cash back.” Saleh asked “How much do you need?” and illegally gave the agent $20 in exchange for $41.22 in LINK food stamp benefits, prosecutors said.

After federal agents raided the store last year, they stopped Fatima Saleh outside her home with a suitcase packed with more than $350,000 in cash and more than 800 coupons for the WIC supplemental food program, authorities said.

In addition to the store participating in the federal food-stamp program, Fatima Saleh was personally signed up for food-stamp benefits since 2005, she later told authorities.

Editor’s Note: The food market referenced in the above article has no relationship to the upscale specialty suburban food store chain.

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