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Ibrahim Zughbi, 65, and his 61-year-old wife, Miriam, opened Jamaica Meat Market, a medium-size grocery store, in January 2014.
They were authorized to accept benefits provided by SNAP -- formerly known as the Food Stamp Program -- which is administered by the U.S. Department of Agriculture, U.S. Attorney Craig Carpenito said.
Noticing a high volume deducted electronically through SNAP debit cards, federal authorities sent in a customer who made 16 "purchases" at Jamaica Meat Market, obtaining cash from either or both of the Zughbis, Carpenito said.
Ibrahim Zughbi previously participated in the Supplemental Nutrition Assistance Program (SNAP) when he was the owner of Neighborhood Supermarket, a grocery store that operated out of the same location, the U.S. attorney said.
The USDA permanently disqualified him in March 2011 after the market was accused of several SNAP violations, Carpenito said.
"Another individual took over the business, changed its name to Jamaica Meat Market, and certified in writing to the USDA that Ibrahim Zughbi would have nothing to do with the business or its participation in the program," he said. "Zughbi continued to run Jamaica Meat Market, and continued to exchange cash for SNAP benefits."
Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, with which to make purchases, the U.S. attorney said. Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal, he said.
After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied, Carpenito said.
The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the amount is credited to the retailer’s designated bank account, he said.
To conceal the proceeds of the SNAP benefit fraud, Ibrahim Zughbi admitted, he wrote inflated checks from the Jamaica Meat Market account containing the SNAP fraud proceeds to a supplier.
He said he then received funds back in cash from the supplier.
Zughbi also issued checks to family members with no apparent connection to Jamaica Meat Market, Carpenito noted.
Ibrahim Zughbi pleaded guilty to benefit fraud and money laundering before U.S. District Judge Peter G. Sheridan in Trenton, while Miriam Zughbi pleaded guilty to conspiracy to defraud the United States, both in exchange for leniency at sentencing.
Sheridan scheduled sentencing for July 17.
"Retail food stores approved for participation in SNAP may sell food in exchange for SNAP benefits," Carpenito said. "They may not exchange SNAP benefits for cash."
Carpenito credited special agents of the U.S. Department of Agriculture – Office of Inspector General, and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) with the investigation leading to Wednesday's pleas.
He also thanked the Passaic County Prosecutor’s Office, the Wayne Township Police Department and the Paterson Police Department for their roles in the investigation.
Handling the case for the government is Assistant U.S. Attorney Sean M. Sherman of Carpenito's Public Protection Unit in Newark
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