Fort Smith Store Owners Sentenced For Defrauding IRS, USDA
FORT SMITH (KFSM) — The owners of three Fort Smith convenience stores were given just over a year in federal prison and ordered to pay nearly $400,000 in restitution for defrauding the Internal Revenue Service and U.S. Department of Agriculture.
Raja Khani Zaman and his son, Haroon “Harry” Zaman, were sentenced last week to 16 months in prison followed by one year of supervised release for illegally using food stamps to buy products for resale in their stores — Fenny’s, Park Mini Mart and Grand Convenience.
Both men were ordered to pay $54,000 to the USDA and roughly $320,00 to the IRS.
The pair, along with Raja Zamn’s other son, Ahmed Zaman, pleaded guilty in December 2018 in Fort Smith federal court to conspiracy to traffic Supplemental Nutrition Assistance Program (SNAP) benefits.
Ahmed Zaman received three years probation and was ordered to pay $54,000 in restitution to the USDA for his role in the scheme.
Between 2012 and 2016, federal prosecutors said the Zamans used four primary methods to defraud the agencies:
- Allowing SNAP recipients to purchase prohibited items at twice the price
- Purchasing SNAP benefits from SNAP recipients for cash
- Asking SNAP recipients to buy items in the Zaman’s convenience stores and providing cash in return
- Taking SNAP recipients to other stores to purchase items through SNAP for resale at the Zaman’s convenience stores
Raja and Harry Zaman would deposit the proceeds from these illegal transactions into bank accounts as legitimate earnings, which were later under-reported on their tax returns from 2013 to 2015, according to court documents.
SNAP is a federal program that offers nutrition assistance to low-income individuals and families, according to the USDA.
SNAP, commonly referred to as food stamps, is administered by the states. It’s the largest program in the domestic hunger safety net, according to the USDA.
Investigators used confidential informants to conduct controlled transactions of SNAP benefits that were later used to buy products for resale in the Zaman’s stores, according to court documents.