The government alleges the Sufis conspired to commit food stamp fraud, operate an unlicensed money transmitting business that sent money to African and Middle Eastern countries, and structured financial transactions to evade federal reporting requirements.
Indictments filed Thursday against the brothers lay out a three-year trail of deceit that ultimately led to Mohamed Sufi’s arrest this week, about two months after Omar Sufi fled to Africa.
Authorities allege the men swiped $381,467 through illegal transactions involving the Department of Agriculture’s food stamp program, court records show.
Documents reveal they are accused of buying benefits from federally-funded programs by trading cash or store items, profiting between 20 and 30 percent on each deal involving food stamps and 40 to 50 percent for Women, Infants and Children assistance.
Agents also say the brothers charged customers a 6 to 7 percent fee to send money to foreign countries, including Ethiopia, Saudi Arabia, Sudan and the United Arab Emirates.
They allegedly made the unlicensed transfers through Qaran Express Financial, LLC, an Ohio business, and Abbas Phone Card and Grocery, another unregistered agent in Detroit.
The money moving business was deliberately structured with cash deposits to obtain cashier’s checks valued at under $10,000, which don’t have to be reported to the government, the indictment states.
Investigators found a handwritten 182-page ledger detailing the money received from customers and transferred to others, the government said.
Travis Deters, a federal agent, said in a criminal complaint the store reported $133,000 in sales between August 2007 and July 2008, but took in more than $167,000 from benefits.
“The fact that supposed benefit redemptions actually exceed the total sales of the store suggests that a significant portion (if not all) of the business’ revenue is derived from fraud,” Deters wrote.
Similar size stores redeemed an average of $1,255 per month while Halal Depot cashed in $10,250 per month, Deters found in a comparison of area retailers.
A confidential informant went into the business four times and peddled food stamps for cash, pre-paid phone cards, cologne and other items that don’t qualify for the program, authorities said.
After a search at the business in July 2009, Deters said Mohamed Sufi admitted violating food stamp regulations and to running a “hawala,” an Arabic term for an informal international money transfer.
Court records show Omar Sufi left Grand Rapids June 1 and arrived in Nairobi, Kenya. He exchanged $3,500 in cash for newer $100 bills before making the trip, authorities said.
Mohamed Sufi is in federal custody and scheduled for an Aug. 16 arraignment and detention hearing. He could face up to 20 years in prison, if convicted.
