MASTIC, N.Y. -- Attorney General Eric T. Schneiderman has announced the conviction of Sajjad Rashid, 43, of Rocky Point, N.Y., the owner and manager of a Suffolk County convenience store, who orchestrated a multi-year larceny scheme to illegally trade cash for almost $1 million in Supplemental Nutritional Assistance Program (SNAP, formerly known as the Food Stamp Program) benefits.
From 2012 to 2014, a ring of corrupt store owners and clerks at Mastic Supermarket Corp., Mastic, N.Y., rang up hundreds of thousands of dollars in phony food stamp transactions at taxpayer expense, Schneiderman said.
The corporation, Mastic Supermarket, was also convicted.
The investigation determined that nearly $1 million was fraudulently stolen from the government program as a result of this scheme.
"Mr. Rashid's scheme not only ripped off taxpayers, but also the many New Yorkers in need who depend on food stamp benefits, specifically those harmed by Hurricane Sandy," said Schneiderman.
Rashid, who was the scheme's ringleader, pleaded guilty to the four-count indictment lodged against him in Suffolk County Supreme Court before Justice John B. Collins, including one count of grand larceny in the second degree (a Class C felony), one count misuse of food stamps (a Class C felony), and two counts of falsifying business records in the first degree (a Class E felony. In exchange for his plea, Collins promised Rashid a sentence of between one-and-a-half to four-and-a-half years and two-and-a-half to seven-and-a-half years in state prison.
Rashid's sentencing is scheduled before Collins on May 19, 2015.
Mastic Supermarket Corp. pleaded guilty to one count of grand larceny in the second degree (a Class C felony). In exchange for this plea, Collins will order the corporation to pay restitution in the amount of $974,619. It will be dissolved.
Last month, Haricharan Malhotra, a clerk at Mastic Supermarket, was sentenced to one-and-a-third to four years in prison for his role in this scheme.
According to the indictment and statements made by prosecutors, Rashid, used his position as the co-owner and manager of Mastic Supermarket, operating with the business name "Shop With Us Quality Foods," to fraudulently exchange food stamps for cash. The evidence revealed that on hundreds of occasions, dozens of SNAP recipients presented their SNAP benefit cards to Rashid at the register at Mastic Supermarket. Instead of ringing up eligible food purchases, Rashid rang up phantom purchases and then split up cash in the amount of the phantom purchase between the store and the recipients. The government then reimbursed Mastic Supermarket for these phantom purchases made using SNAP benefits cards.
These illegal exchanges sharply increased in the wake of Hurricane Sandy, when the government program allocated an additional 50% in benefits to all SNAP recipients in affected areas, without regard to need. After the storm, numerous SNAP Recipients in Suffolk County received this Sandy benefit and then illegally exchanged their benefits for cash at Mastic Supermarket.
The case stems from an investigation initiated by the United States Department of Agriculture and the Attorney General's Criminal Enforcement and Financial Crimes Bureau in 2013. A civil lawsuit, filed by the Attorney General's Office against Rashid and other individuals and corporate defendants, is still pending. The AG's lawsuit seeks $973,000 in restitution.
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