Federal agents are investigating a Portland grocer on the suspicion of a welfare fraud scheme that may have cost taxpayers tens of thousands of dollars, documents filed in federal court show.
Ali Daham, who owns Ahram Halal Market on Forest Avenue, has not been charged with any crime, but investigators say that he has spent years allowing food stamp recipients to exchange their aid vouchers for cash and pocketing some of the proceeds.
Gov. Paul LePage seized on the investigation as evidence that Maine needs to crack down on welfare fraud after the news was first reported by conservative news site LifeZette.com.
With no charges yet brought in the investigation, many involved are tight-lipped. (A spokesman for the Department of Justice declined to comment; the Boston office of the FBI did not immediately return a message seeking comment; Daham was not immediately available to speak to a reporter.)
Here’s what we know and what we don’t.
The details of the investigation
In an affidavit filed on April 26 to obtain a search warrant, FBI agent Richard Pires describes a sting operation in which investigators sent an unnamed informant to Ahram. In Fall 2015, Daham told the informant how to lie on his or her application for food stamps in order to get more money, and then later let the informant make cash withdrawals against with the voucher meant to help Mainers struggling with hunger and poverty, the document states. The “cash came from [Daham’s] back pocket” rather than the register, according to the affidavit.
Investigators found that small Portland grocery was taking in welfare money on par with 44,000-square-foot Hannaford supermarket up the street, and had an unusual frequency of large dollar transactions.
At Hannaford, the average food stamp sale totaled $34.85 and only 29 percent of such transactions were for more than $100, and other local groceries had similar sales patterns, the affidavit states. But at Ahram, the average food stamp purchase was for $82.55 and 78 percent of transactions were for more than $100. In 2015, Hannaford recorded $298,706 in food stamp transactions, while Ahram had $268,047 that year, the affidavit states.
From Aug. 2012 to Aug 2015 the small grocery redeemed nearly $3 million in food stamp benefits and Daham withdrew $591,000 in cash, the court documents state. The investigators also raised suspicion that an associate of Daham’s was preparing fraudulent tax returns out of the grocery store.
In April investigators seized computers, records, jewelery and nearly $70,000 from Daham.
No one has been charged.
Despite the property seizures six months ago, no charges have been brought against Daham. Authorities have not elaborated on the court documents, nor indicated when and if charges will be brought, and a lawyer for Daham has denied any wrongdoing.
“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,” Augusta lawyer Walter McKee told the Portland Press Herald.
In a previous case in Lewiston, it took authorities 2 ½ years to charge a Lewiston couple with welfare fraud after raiding their store.
What LePage is saying
Although no charges have been brought, LePage pointed to the investigation as proof that the state’s welfare system is commonly abused and in need of reform. The investigation was prompted by auditors in Maine’s Department of Health and Human Services.
From 2010 to July of this year, 220 cases of welfare fraud prosecuted by the Maine Attorney General resulted in conviction or plea deal, with court ordered restitution totaling nearly $87 million. AG spokesman Timothy Feeley did not immediately know how many cases had resulted in acquittals, but said that vast majority of those brought to trial saw a conviction or settlement.
A Department of Justice spokesman said he did not have any statistics on how common federal welfare fraud cases are in Maine.
The governor criticized Maine media for not reporting the story earlier, saying in a statement that “by purposely choosing not to cover this story, Maine media is complicit in hiding welfare fraud.”
BDN statehouse bureau chief Chris Cousins pushed back on that in this morning’s Daily Brief political newsletter:
LePage said his communications staff have been talking to “reporters in Augusta … for months” about the issue.
To set the record straight: No one has ever approached the Bangor Daily News about this story and my colleague at the Portland Press Herald, Scott Thistle, said the same when we spoke this morning.
The governor also used the news of the investigation by three federal agencies as an opportunity to criticize the federal government.
“I hope the Obama Administration is not turning a blind eye to such brazen tax and welfare fraud,” LePage said.