Federal authorities are investigating a Portland business owner in connection with suspected welfare fraud that they say cost taxpayers tens of thousands of dollars, according to documents filed in U.S. District Court in Portland.
Investigators say Ali Daham, owner of the Ahram Halal Market on Forest Avenue, used his business to perpetrate a cash-back scheme that turned food stamp benefits into cash, and that he pocketed a portion of the funds.
No criminal charges have been filed, but investigators say the cash-back scheme was one of multiple criminal enterprises that flowed through the store, including through an associate, Ashraf Eldeknawey, who allegedly offered to prepare fraudulent tax returns to enrich others and himself.
In an interview Monday at the market, Daham said he was aware of the investigation and referred all questions to his attorney, Walter McKee of Augusta.
“Ali has been adamant that he has done nothing wrong,” McKee said in a written statement. “He looks forward to a full airing of what did – and most importantly did not – happen. Until then he is going (to) have the benefit of the time-honored American tradition of the presumption of innocence.”
COMPARING SALES AT OTHER STORES
An affidavit filed in support of a search warrant by FBI Special Agent Richard Pires Jr. describes an organized, systematic scheme to convert benefit dollars meant to feed hungry Mainers into cash. The investigation was spurred by auditors for the Maine Department of Health and Human Services.
Fraud investigators from the FBI, IRS and the Department of Agriculture, which runs the Supplemental Nutrition Assistance Program commonly known as food stamps, compared records of SNAP transactions at Daham’s store with the volume of benefit transactions at other stores in the city. They found that on paper, the tiny market with one register was processing a volume of SNAP transactions comparable to the flagship Hannaford supermarket on Forest Avenue, which has 44,000 square feet of retail space and 18 checkout lanes.
In budget year 2015, for instance, the Hannaford store recorded $298,706.04 in SNAP transactions, while Ahram recorded $268,047.04 in the same period.
The high dollar amounts of each transaction at the small business also were unusual, investigators said. Comparing data from the Forest Avenue Hannaford, Daham’s store and Pat’s Meat Market on Stevens Avenue, a similarly sized grocery business, investigators showed that customers at Ahram Halal Market made outsized purchases using SNAP benefits at a far more frequent rate.
At Hannaford, the average SNAP sale totaled $34.85, and less than a third, 29 percent, of all SNAP transactions were for more than $100. At Pat’s on Stevens Avenue, the sales figure was $33.31, with nearly a third, about 32 percent, for more than $100.
But at Ahram Halal Market during the same period, the average SNAP transaction totaled $82.55, with nearly 78 percent of every SNAP transaction for an amount greater than $100.
Investigators also used a cooperating witness who made purchases while undercover at the store. The witness, who is not named, would ask to get cash back, and after Daham overcharged the witness’s EBT card, he would pull cash from his pocket or from the store’s register to give to the witness.
Because no charges have been filed, the exact amount that investigators allege Daham fraudulently collected is not known. One potential indication is the amount of cash he withdrew to disburse to customers who were looking to convert their EBT card benefits into cash.
Between June 7, 2011, and Aug. 25, 2015, accounts controlled by Daham received government reimbursements of about $3 million for benefits, and he withdrew about $591,000, according to the affidavit.
CASH, COMPUTERS, RECORDS SEIZED
The investigation was first publicized on Lifezette.com, a news site founded by Laura Ingraham, a conservative talk radio host and a longtime Fox News contributor.
The market, near the busy Woodfords Corner intersection, has elaborate hookah water pipes and colorful candy on display in the window. Inside, the shelves are stocked with Middle Eastern food and ingredients not often found in traditional American grocery stores. The coolers carry halal meat, which is prepared in accordance with Muslim beliefs.
After executing the search warrant on April 28 at the store, authorities reportedly seized four computers, an EBT/credit card terminal, paper financial records and two bank bags containing an unidentified amount of cash and a gold ring.
The same day, a team of investigators also searched Daham’s Westbrook home, leaving with $17,609 in cash, a computer, an iPhone, several USB storage drives, two watches, various pieces of jewelry, financial records, state benefit administration records, and paperwork for the sale of a Land Rover dated December 2013.
Authorities also seized about $52,000 in a Bank of America business account.
The affidavit, which contains a range of allegations beyond food stamp fraud, was filed in U.S. District Court in April by Pires, a special agent who has been with the FBI for 17 years.
“We are going to let the court documents speak for themselves,” FBI spokeswoman Kristen Setera said in an email to the Press Herald late Monday evening. Setera declined to comment further. The U.S. Attorney’s Office also declined to comment, citing the ongoing investigation.
Daham, who himself was approved for food stamps and other state benefits such as MaineCare, also is alleged to have lied to state and federal regulators about his income and assets.
Investigators also believe Daham was using the store to defraud the WIC program, which gives needy mothers checks that can be used only to purchase baby food and baby formula.
POSSIBLE TAX REFUND SCHEME
Between September 2014 and June 2015, Daham failed to show that he actually purchased 2,956 cans of baby formula worth more than $55,000 that corresponds to vouchers redeemed at his store, and the alleged supplier of the formula, an Everett, Massachusetts, company, was not a certified WIC participating distributor.
A portion of the affidavit also describes an alleged scheme by Eldeknawey, an associate of Daham, to prepare fraudulent tax returns designed to net large refunds.
Eldeknawey ran his tax preparation business from a back office in the Ahram market, and for a fee paid with cash diverted from the state benefits system, offered to fraudulently file a tax return that would maximize a customer’s tax refund.
Investigators also found that in preparing the fraudulent returns, Eldenawey listed customers of the fraudulent tax service as employees of businesses he owned in order to lower his overall tax liability.
Leonard Sharon, an attorney for Eldeknawey, did not immediately respond to a request for comment Monday afternoon.
Staff Writer Eric Russell contributed to this report.
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