ALBANY, N.Y. -- New York Attorney General Eric T. Schneiderman has announced the sentencing of Haricharan Malhotra, a Suffolk County convenience store operator who pleaded guilty for participating in 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.
In December 2014, Malhotra pleaded guilty in Suffolk County Supreme Court to the crime of grand larceny in the third degree.
Judge James Hudson has sentenced Malhotra to one and one-third to four years in prison.
According to the indictment and statements made by prosecutors, Malhotra, together with the store's two owners, used his position as a clerk at Mastic Supermarket convenience store 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 Malhotra at the register at Mastic Supermarket. Instead of ringing up eligible food purchases, Malhotra 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 investigation determined that nearly $1 million was fraudulently stolen from the government program as a result of this scheme.
The case stems from an investigation initiated by the U.S. Department of Agriculture and the Attorney General's Criminal Enforcement & Financial Crimes Bureau in 2013. A civil lawsuit, filed by the AG's Office against Malhotra and other individual and corporate defendants, is still pending. The AG's lawsuit seeks $963,000 in restitution.
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