recordnet.com | 3/28/09 | $2 million | suspect: Ahmad & Mumraiz Khan | victim: U. S. government
A Stockton man, his brother and daughter have been indicted on charges they ran a food stamp fraud scheme netting $2 million from a downtown smoke shop, the U.S. Attorney's Office in Sacramento said Friday.
Brothers Ahmad Khan, 51, and Mumraiz Khan, 48, have been charged with conspiracy, food stamp fraud and money laundering, among other charges. Ahmad Khan's daughter, Naheed Khan, 23, has been charged with conspiracy.
In the alleged scheme, the three bought food stamps at 50 cents on the dollar from customers at the Smoke Shop & Snack at 425 E. Miner Avenue. The shop had been redeeming the food stamps for five and a half years, prosecutors said.
Federal agents used confidential informants to make purchases, according to a 33-page affidavit filed in support of the criminal complaint that details the investigation.
The investigation revealed that last year alone, the family-run shop reported selling $6,818 worth of food, yet it redeemed $718,056 in food stamps, prosecutors said.
By law, only eligible food stamp recipients can buy food at authorized stores. The brothers drew the laundering charge on suspicion that they transferred money to Pakistan.
