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Michigan business owner sentenced to prison for wire fraud

On Behalf of | Feb 7, 2022 | White Collar Crimes |

A Michigan man was sentenced to 42 months in a federal prison on Feb. 1 for defrauding the United States Department of Agriculture’s Supplemental Nutritional Assistance Program out of more then $4 million. The man, who was the owner of a Flint meat store when he committed his crimes, was also ordered to make restitution in the amount of $4,424,692 to the USDA. The sentence was handed down after the man entered into a plea agreement with the U.S. Attorney’s Office for the Eastern District of Michigan. He was originally charged with multiple counts of wire fraud and a single count of food stamp fraud, and being found guilty by a federal jury could have sent him to prison for decades.

Cash for benefits scheme

According to court documents, the man allowed people to use their SNAP cards on point-of-sale devices in his store even when they were not purchasing food. He then gave the SNAP recipients half of the money. The man also worked with a local car wash to exchange SNAP benefits for cash. The man was taken into custody by government agents and indicted by a federal grand jury for committing white-collar crimes in April 2017.

Expired food and rotting chicken

Other details reveled by court papers suggest that the SNAP beneficiaries who participated in the scheme may have been wise to purchase their food elsewhere. When federal agents executed a search warrant at the man’s store, they discovered unsanitary conditions and large amounts of expired food. One worker is said to have told agents that the man ordered him to pour water containing bleach onto rotting chicken carcasses to make them easier to sell.

Technology connects the dots

Crimes like these rarely go undetected for long because payment and benefit processing systems have complex algorithms that are designed to identify and flag suspicious transactions. When investigators are called in, they can use this information to determine what happened and build a case. Documents and electronic data are powerful evidence in criminal cases because they tell a compelling story and are difficult or impossible to refute, which is why cases like this one are almost always resolved at the negotiating table long before they go to trial.