Man to be sentenced in massive fraud case

When investigators started examining a South Florida convenience store’s receipts, they figured it was either uncommonly popular with food stamp recipients or the owner was operating a fraud.

Store owner Zulfiqar Mithavayani, 51, of Miramar, could face federal prison when he is sentenced on Thursday. Earlier this year, he pleaded guilty to criminal charges and admitted he committed fraud at his Miami store between October 2012 and March 2016.

In that period, Mithavayani’s store redeemed $1 million more worth of food stamp purchases than the average Florida convenience store, which redeemed about $100,000, federal prosecutors said.

His store, the ABC Food Market, at 163 NW 14th St. in Miami, also did at least four times more food stamp business than the other convenience stores located within a half-mile of his business, according to court records.

Mithavayani was charged in May as part of what investigators called Operation Stampede. They said it was the largest food-stamp fraud takedown in the history of the U.S. and involved the arrests of at least 15 people, most of whom were linked to a flea market in Miami-Dade County.

Though the federal Supplemental Nutrition Assistance Program, also known as SNAP, is commonly known as food stamps, low-income families receive benefits as monthly deposits on a special debit card.

Those benefits are supposed to be spent on certain eligible items and store owners, who participate in the program, are required to sign an agreement that they, and their employees, will not issue cash instead of food, according to court records.

Close to $700,000 worth of the $1.1 million worth of transactions at the store were flagged as potentially fraudulent, investigators said.

The investigation at the ABC Food Market began in March 2013, when an undercover officer used a food stamps debit card to buy food, then stayed in the store and asked customers for cash, authorities said.

Mithavayani later admitted in court that he called the undercover officer over and asked if he wanted $5. The two haggled and Mithavayani fraudulently charged $38.50 worth of “food” to the card and gave the officer $20 in cash, Mithavayani admitted.

The undercover officer completed a total of 15 fraudulent cash transactions at the store in the next 2 ½ years, according to court records. Some of those involved Mithavayani, but most were approved by one of his employees, investigators said.

The former employee, Jamal Al-Hawa, 60, of Davie, was also indicted earlier this year but is listed as a fugitive.

Mithavayani pleaded guilty to eight counts of wire fraud and one of wire fraud conspiracy in July. The maximum possible punishment is 20 years in federal prison per charge, though he would likely get a much lesser punishment.

His sentencing hearing began on Monday in federal court in Miami but was adjourned to Thursday so lawyers can gather more information for U.S. District Judge Cecilia M. Altonaga, who will make the final decision.

Prosecutors have not indicated what sentence they will recommend but wrote in court records that, by even a conservative estimate, Mithavayani owes more than $694,500 in restitution.

The defense is contesting that estimate and recommending a punishment of house arrest or a maximum of 10 to 16 months in federal prison, partly because Mithavayani has no prior criminal history. Mithavayani’s lawyer wrote in court records that a defense expert calculated the total loss at less than $50,000.