FORT SMITH -- The federal government is seeking forfeiture of nearly $157,000 from the owners of three Fort Smith convenience stores, saying that they used federal nutrition program cards to buy inventory.
The U.S. attorney's office filed Monday a civil forfeiture case listing $156,720 seized in a money laundering and Supplemental Nutrition Assistance Program trafficking investigation involving Raja Zaman and his son Haroon.
Federal agents executing a search warrant in January at the house on 6315 Gary Lane in Fort Smith found money hidden under mattresses, in sport coat pockets and a SpongeBob SquarePants tin container, according to an affidavit filed in the case.
Interviewed by federal agents, Haroon Zaman admitted to using the cards to buy inventory for his stores, the affidavit said. Raja Zaman also admitted to using the cards but said he did it to help people who asked to sell some of their program benefits, according to the affidavit.
There is no federal court record of the Zamans being charged with criminal offenses. In civil forfeiture "in rem" cases, the government goes after a violator's property rather than the violator, according to the Cornell University Law School website.
The U.S. attorney's office didn't respond Tuesday to a request for comment.
"The investigation to date demonstrates that from a time period spanning from approximately July 6, 2013, through the present, the Zaman family has operated and continues to operate a money laundering scheme in which they convert the proceeds of Supplemental Nutrition Assistance Program (SNAP) fraud into convenience store inventory," the affidavit by Internal Revenue Service criminal investigator Lee Stovall said.
The Zamans could not be reached for comment Tuesday. Fort Smith attorney Rex Chronister was listed as the defendants' attorney in the forfeiture action, but he was not available for comment.
The Zamans were listed as the owners of Fenny's Convenient Store at 3515 Towson Ave., Park Mini Mart at 3601 Park Ave., and Grand Convenience Store at 4201 Grand Ave. The stores began participating in the Supplemental Nutrition Assistance Program in 2012 or 2013, the affidavit said.
State records show that the three stores' limited liability corporation status has been revoked.
The Supplemental Nutrition Assistance Program, formerly called the food stamp program, provides low-income people with assistance in obtaining food. The person receives his benefits through an electronic benefit transfer card that is set with a certain amount of money. The person uses the card to make eligible food purchases from approved retailers.
The affidavit said the Zamans used participants' cards at Fort Smith-area stores to purchase items -- mostly beverages such as soda and water -- then stock the items on their shelves for sale and pay the cardholders in cash for the use of their benefits.
A former convenience store employee told federal agents the Zamans kept a 3-inch stack of electronic benefit cards in a box at one of the stores.
Sometimes the Zamans would take the cards and make the purchases, according to the affidavit. Other times, they would go with the cardholders and direct them to make the purchases, or they would send the cardholders to the store with a list of items to purchase.
Federal agents interviewed the manager of CV's Family Foods, a grocery store located about a half-mile from Fenny's, according to the affidavit. He said he saw the Zamans make nutrition program purchases of "voluminous amounts of soda and water on multiple occasions."
On one occasion, the manager followed the Zamans, who were driving a truck containing their purchased items, the affidavit said. The manager said he saw them unload the items from the truck into Fenny's.
State Desk on 07/27/2016