Bessemer Grocer Pleads Guilty to $5M Food Stamp Fraud

BIRMINGHAM – In a shocking case of corruption, Hasan F. Ahmed, 50, owner and operator of Associated Discount Foods on Ninth Street South in Bessemer, pleaded guilty to defrauding the food stamp program of more than $5 million, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and U.S. Department of Agriculture Office of Inspector General, Investigations, Special Agent in Charge Karen Citizen-Wilcox.

Ahmed pleaded guilty before U.S. District Judge R. David Proctor to one count each of food stamp fraud, tax evasion and structuring currency transactions and four counts of money laundering. As part of his plea, Ahmed agreed to forfeit $5.2 million to the government as proceeds of his illegal activity, including his interest in $375,027 which the government already has seized from the grocery store and four bank accounts.

“The SNAP program provides assistance for those who need help to feed themselves or their families. It is not an open pocketbook for criminals to abuse in order to selfishly enrich themselves,” Vance said. “This was not a victimless crime. Instead of fulfilling his obligations, Mr. Ahmed used his position to defraud $5 million from a taxpayer-funded program.”

Associated Discount Foods is a mid-sized neighborhood grocery store that was authorized by the USDA to accept SNAP food stamp benefits. From January 2007 through December 2010, the store’s average monthly SNAP redemptions were $4,196, increasing to $17,457 in January 2011, according to Ahmed’s plea agreement with the government.

“Based on ADF’s total SNAP redemptions and comparison analysis, the defendant acquired an estimated $5,243,866.49 in SNAP benefits from July 2011 through June 2014 in a way that was contrary to law,” the plea agreement states. Ahmed’s redemptions rose dramatically because he illegally swapped food stamps for cash, at less than the stamps’ face value, and allowed customers to purchase ineligible items with food stamp benefits at inflated rates, according to the document.

Ahmed evaded taxes on the illegal income when he filed a federal income tax return for the 2013 tax year claiming total income of $24,728 when his actual income was $210,927, according to his plea. Ahmed’s sentencing date has not been set.

“Hasan Ahmed made an illegal profit by taking advantage of a benefit program,” Hyman-Pillot said. “His actions were a direct misuse of tax dollars. IRS Criminal Investigation and our law enforcement partners will work aggressively to uncover similar schemes and return the illicit proceeds back to the United States Government.”