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Post date: March 12 2015

A.G. Schneiderman Announces Guilty Plea And Prison Sentence For Suffolk Convenience Store Owner And Corporation In Nearly $1 Million Food Stamp Fraud

Operator Of Mastic Supermarket Pleads Guilty To Indictment and Will Serve Prison Time; Corporation Pleads Guilty and Will Sign Restitution Order for $974,619

SNAP Program Theft Included Emergency Funds Allocated To Help Victims Of Hurricane Sandy

Schneiderman: If You Steal From A Government Benefits Program, You’re Facing Prison Time

MASTIC - Attorney General Eric T. Schneiderman today announced the conviction of Sajjad Rashid, 43, of Rocky Point, 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., located at 1088 Mastic Road, Mastic, NY, rang up hundreds of thousands of dollars in phony food stamp transactions at taxpayer expense. The Corporation, Mastic Supermarket, was also convicted today.

“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 Hurrican Sandy,” Attorney General Schneiderman said. “As seen by today’s sentence, we have no tolerance for this type of fraud: If you steal from a government benefits program, we will seek prison time.”

Rashid, who was the scheme’s ringleader, pleaded guilty to the four-count indictment lodged against him in Suffolk County Supreme Court before the Honorable 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, Justice Collins promised Rashid a sentence of between 1 ½ to 4 ½ and 2 1/2 to 7 ½ years in state prison.

Rashid’s sentencing is scheduled before Judge Collins on May 19, 2015.

The Corporation, Mastic Supermarket, pleaded guilty to one count of Grand Larceny in the Second Degree (a Class C felony). In exchange for this plea, Justice Collins will order the Corporation to pay restitution in the amount of $974,619. The Corporation will be dissolved.

Last month, Haricharan Malhotra, a clerk at Mastic Supermarket, was sentenced to 1 1/3 to 4 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 Corp., 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 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 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 Attorney General’s lawsuit seeks $973,000 in restitution.

The Attorney General thanks: the United States Department of Agriculture, Office of Inspector General, Northeast Region; United States Department of Agriculture, Food and Nutrition Service; the Suffolk County District Attorney's Office; the Suffolk County Department of Social Services; the Suffolk County Police Department; the Nassau County Police Department; and the New York State Department of Financial Services for their assistance in the case.

The case is being handled by Assistant Attorneys General Tyler Reynolds and Rhonda Greenstein of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary T. Fishman and Deputy Bureau Chiefs Meryl Lutsky and Stephanie Swenton. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

The investigation was conducted by Legal Support Analyst Theo Davidson, Investigator Ryan Fannon, Supervising Investigator John Sullivan and Deputy Chief Investigator John McManus. The Investigations Division is led by Chief Investigator Dominick Zarrella.

If see or know of waste, fraud or abuse in a social services program in New York State, please contact the Office of the Attorney General's helpline at (800) 771-7755.