CHICAGO - A former Waukegan grocer was sentenced to 2½ years in federal prison for defrauding government food stamp and nutrition programs of more than $844,000 over approximately two years during an undercover investigation. The defendant, KHALED SALEH, who, together with his wife and co-defendant, FATIMA SALEH, owned and operated Sunset Food Market in Waukegan, illegally exchanged cash on thousands of occasions with customers using food stamp cards and nutrition coupons. They also paid customers approximately half the value in cash for goods the customers purchased at other stores using their benefits, typically infant formula, and then re-sold the same items in their store at a substantially higher price.
Khaled Saleh, 48, was sentenced on Friday to 30 months in prison by U.S. District Judge Charles Norgle, who ordered Saleh to begin serving the sentence on May 31. Sentencing for Fatima Saleh, 37, was continued to March 22. The couple were arrested in May 2011 and both pleaded guilty last August to conspiracy to defraud government programs.
The government administratively forfeited $391,616 in cash and bank account funds that were seized from the Salehs, and Judge Norgle ordered Khaled Saleh to pay $453,013 in restitution for the remaining loss.
“The food stamp and WIC [Women, Infants and Children] programs are designed to help members of society, including children, obtain a more consistent and nutritious diet than they might otherwise enjoy. To [Khaled Saleh], however, these vital programs were nothing more than his personal ATM machine and a means to stock his shelves with cheaply obtained inventory," the government argued at sentencing.
The Salehs participated in the Supplemental Nutrition Assistant Program, formerly known as the Food Stamp Program, and were authorized to accept LINK cards used by customers to purchase eligible food items. Between August 2009 and April 2011, the defendants redeemed more than $1.175 million in LINK funds and WIC coupons.
During the undercover investigation, an agent with the U.S. Department of Agriculture, Office of Inspector General, exchanged food stamp benefits for cash and used benefits to purchase formula at a discount store, which he then re-sold for half the price in cash to the Salehs on several occasions.
After executing a search warrant at the store in April 2011, Fatima Saleh went to her apartment and agents observed her leaving a short time later with a suitcase. After giving consent to search the suitcase, agents found more than $350,000 in cash and more than 800 coupon vouchers for the WIC program. Additional cash was found in the apartment and in the couple’s bank account.
The sentencing was announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Joe N. Smith, Special Agent-in-Charge of the USDA’s Office of Inspector General; and Frank Benedetto, Special Agent-in-Charge of the U.S. Secret Service, both in Chicago. The Illinois Department of Human Services assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Andrew R. DeVooght.
Source: U.S. Department of Justice, Office of the United States Attorneys
