Metro East businessman accused of food stamp and wire fraud

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KMOV.com

Posted on September 8, 2010 at 5:59 PM

Updated Thursday, Sep 9 at 7:45 AM

(KMOV) – A Washington Park businessman is under indictment for food stamp and wire fraud. The charges allege Rami Mohammed stole $1.6 million through illegal food stamp transactions.  

The public loses hundreds of millions of dollars a year nationwide in food stamp fraud, and those are just the cases that have been prosecuted. Food stamp benefits are now given out on debit cards, and food stamp fraud can take two forms: buying prohibited items or selling the cards for their cash value.

 

In the case of Mohammed, prosecutors say he was buying the cards for half their value and pocketing the rest. For example, one could make bogus transactions for $250 and then give the card holder $140 in cash.

One business owner in the Metro East says these types of deals go on every day. He says those same businesses sell prepared food, but ring it up as a grocery item. Such business hurts the restaurant industry where cards are not allowed to be used, he says,

The U.S. Department of Agriculture prosecutes retailers when they commit fraud, but all of last year, only 65 stores in the state of Illinois were sanctioned or disqualified.

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