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Two East Side grocers plead guilty in $300,000 food stamp fraud scheme

Two East Side grocers admitted in federal court to misappropriating close to $300,000 in food stamp benefits at their family convenience store over a period of 13 months.

Bandar Alsaidi, 28, and his brother, Talal Alsaidi, 31, both of Buffalo, pleaded guilty to unauthorized use of food stamp benefits this week before U.S. District Judge Richard J. Arcara.

Each man was convicted of exchanging nearly $148,000 in SNAP benefits for cash between April 2012 and May 2013, prosecutors said.

The Alsaidi family runs the Big Boys Food Market, 1129 East Ferry St. The store, previously run by the men’s parents, closed for a few months in 2011 because of a fire but opened again under Bandar Alsaidi’s proprietorship and became eligible to accept food stamps again starting on Jan. 18, 2012.

According to Assistant U.S. Attorney Aaron J. Mango, the brothers reinstituted what had been a well-organized food stamp trafficking scheme almost immediately.

The investigation was prompted by a hotline complaint in 2010 that the operators of Big Boys were illegally processing benefits for cash and also allowing customers to use their benefit cards for ineligible items such as cigarettes, diapers and beer. According to the criminal complaint filed when the men were charged in December 2014, the tipsters also said “the store will only do these transactions with long-term customers that they know and trust.”

Because of that caution, the agents of the U.S. Department of Agriculture began sending undercover witnesses to do regular business at Big Boys.

They discovered the illegal transactions took different forms. Sometimes the store would debit the benefits card for a large amount and pay the cardholder half that money back in cash. In one instance, the witness asked the man at the counter – later identified as Talal Alsaidi – to exchange $200 in food stamps for $100 in cash, but Alsaidi “stated that he did not do even dollar amounts and agreed to do $170 for $85.”

After the USDA executed search warrants for suspected food stamp trafficking at four other stores in Buffalo in September 2012, the brothers became more cautious, the complaint says. The next time a witness tried to get cash for food stamps, the clerk told him instead to go to another grocery and buy chicken wings for Big Boys. When the witness came back with $180 worth of wings, Talal Alsaidi gave him $90.

The complaint cites repeated instances of the witnesses getting cash for debit transactions or for purchasing stock for the store, and it became clear that the other groceries were well aware of where the large food stamp purchases were going: “During the transaction (at one grocery) the employees discussed amongst themselves which type of hamburger patties and French fries Big Boys gets, and how much they charge Big Boys for these items,” the complaint states.

The other grocers even took orders from Big Boys customers for future delivery when they were out of stock.

According to this week’s plea agreements, the government’s electronic transfer terminal at Big Boys showed “approximately $671,174 of legitimate and illegitimate transactions for the time period in question,” and each defendant admitted to knowing that “approximately $147,658.28 of his acquisition or possession of food stamp benefits was unauthorized by statute or regulations.”

The family has been in this situation before. The USDA investigated the store in 2001 and 2003, when the men’s parents, Amin Alsaidi and his wife, Belal, ran it as Al’s Food Market. Amin Alsaidi was convicted in February 2003 on federal charges of unauthorized use of food stamps and his wife then became the store’s sole proprietor.

The brothers’ charges carry a maximum sentence of 20 years in prison and a $250,000 fine, but the plea agreements indicate the actual sentences may be in a range of 15 to 27 months with fines no greater than $50,000, plus mandatory restitution for the full amount misappropriated. Sentencing is scheduled for Nov. 3.