Mohammad Shafiq, Muhammad Sarmad Guilty in $7.2M Food Stamp Scam

Baltimore, Maryland — Two convenience store operators copped to a years-long scheme to rip off the federal food stamp program, siphoning more than $7.2 million in benefits meant for the hungry. Mohammad Shafiq, 50, of Gwynn Oak, and Muhammad Sarmad, 40, of Nottingham, each pleaded guilty on December 15, 2016, to conspiracy to commit food stamp fraud and wire fraud — cashing out Supplemental Nutrition Assistance Program (SNAP) benefits in exchange for cold, hard cash.

The duo ran a network of stores across the Baltimore area authorized to accept EBT cards — the so-called Independence Card in Maryland — but instead of selling groceries to low-income families, they laundered billions in phantom food sales. Shafiq and family operated four locations: Quick Stop Convenience Store, New York Food Mart, Barclay Food Mart, and Shafiq Corporation in Dundalk. From October 2010 through July 2016, they billed the government for over $3.7 million in food that was never sold or grossly inflated.

Sarmad and his crew weren’t far behind. They owned and ran New Sherwood Market, Martin Mart, Rosedale Mart, and M&A Mart across Northwood, Middle River, Rosedale, and Baltimore. Between October 2010 and August 2016, Sarmad’s operation pocketed more than $3.5 million in SNAP reimbursements for food that didn’t exist. Both men were trained on program rules — they knew exchanging benefits for cash was a federal crime.

To dodge red flags, the defendants split transactions, drained cards over hours or days, and routed payments through other stores using manual processing. The fraud relied on deception at every turn: no food changed hands, but the government kept paying. SNAP, run by the USDA’s Food and Nutrition Service, is designed to help struggling families eat — not to bankroll criminal enterprises disguised as corner stores.

Each man now faces up to five years behind bars. U.S. District Judge Richard D. Bennett set sentencing for Sarmad on March 20, 2017, at 3:00 p.m., and for Shafiq the following day at the same time. Their guilty pleas expose a gaping vulnerability in a system meant to feed the poor — exploited by those who treated EBT cards like ATMs.

“This wasn’t charity — it was theft,” said U.S. Attorney Rod J. Rosenstein, who credited the USDA Office of Inspector General and FBI for cracking the case. “These retailers abused a lifeline program, turning food aid into cash.” The investigation continues as authorities probe potential co-conspirators and broader network ties in one of Maryland’s largest SNAP fraud busts to date.