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TEN VENDORS CHARGED IN LINK CARD STING

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Thursday, May 12, 2011 —Ten people have been charged in connection with a year-long investigation into organized retail theft and LINK card fraud, Sheriff Thomas J. Dart announced Thursday.

“Operation Broken LINK” targeted suburban convenience stores engaged in illegal practices involving the Electronic Benefit Transfer cards known in Illinois as “LINK”.  Over the course of the investigation, the Cook County Sheriff’s Office worked with the United States Department of Agriculture’s Office of the Inspector General to identify vendors trading LINK benefits for cash, and dealing in stolen merchandise. 

The Cook County Sheriff’s Office first developed intelligence regarding the LINK card fraud in May, 2010.  Detectives were able to identify a number of stores in the city and suburbs that were giving customers cash back on their LINK cards in violation of USDA rules.  In addition, many of these same stores were trafficking in stolen goods – merchandise taken from the shelves of retailers like Walgreens, and resold to impoverished customers for five times the original price.

Through the use of undercover investigators, Cook County Sheriff’s Police detectives and USDA agents methodically gained the confidence of owners and clerks at the target stores who were engaged in the illegal practices.  Utilizing LINK cards provided by the USDA, undercover agents conducted monitored transactions at the businesses, regularly obtaining cash back and purchasing illicit items on the cards.

Stores identified as committing ongoing violations were:

Detectives identified similar patterns and practices of LINK card fraud and retail theft common to most of the vendors.  Undercover agents would bring purportedly “stolen” merchandise to the establishments and ask for money in exchange.  Of particular interest to the store owners were items such as razors and over-the-counter pharmaceuticals.  The vendors would pay the seller a small fraction of the retail value of the item, then resell it in the store for five times the original cost.  Some stores kept log books near the register to keep track of the money given to LINK recipients and the amount charged to each card. 

On one occasion, an undercover investigator entered Sam’s Pantry in Bellwood, with a plastic bag containing “stolen” goods from Walgreens.  The owner purchased three packages of Mach3 razors from the undercover for $3.00.  The total retail value of the packages is $77.97.  In addition, the undercover requested a “one-for-one” transaction in the amount of $40.00, which means an even split of cash from a fake transaction.  The owner gave the undercover the agreed-upon cash back, but then swiped the LINK card two times, doubling his take, thinking the undercover wouldn’t know. 

Vendors regularly added $20.00 or more “fees” for cash back transactions in order to increase their own profits.  Based on their LINK transactions, vendors received cash reimbursement from the government for the charged debit amounts.  LINK benefits are only supposed to be used for eligible food items, and not for products including alcohol, cigarettes, pharmaceuticals or cash, but the targeted stores allowed purchase of any item on the card.

Often, a customer who wanted cash back on their LINK card would receive money in exchange for the use of their LINK card by the vendor.  The recipient would leave the card, along with the PIN number, with someone at the store who would then use the card to purchase goods cheaply elsewhere.  Those goods would then be resold at their own business at a steep markup. 

Another fraudulent scheme involved giving cash back without any merchandise being exchanged.  For example, on April 15th, an employee at LNR Family Store in Maywood gave an undercover agent $140 cash back on a LINK card, then charged $328.52 to the account.  Vendors often lied to the undercover agents about the balance on their LINK card, in order to divert more money for their personal use. 

LNR in particular used LINK card fraud as a main source of revenue.  On February 5th, an employee at LNR asked the undercover to go to a discount grocery store and purchase $232 in frozen pizzas on his LINK card in exchange for $100 cash.  On another occasion, LNR paid the undercover $35 for $482.50 in “stolen” Walgreen’s products.   Despite being a small corner store with a limited selection, LNR conducted in excess of $40,000 per month in LINK transactions, the vast majority of it fraudulent.

After conducting surveillance and monitoring fraudulent transactions, detectives were able to obtain search warrants for the targeted stores, beginning in December of last year.  On December 9, 2010, Cook County Sheriff’s Police officers and USDA agents raided Convenient Food mart and arrested three people.  On March 31st officers searched N&Z Foods, arrested two people and also recovered $535.00 in counterfeit money that was stacked near the register.  Working with investigators from Walgreens’ Organized Retail Crime Division, officers identified and seized merchandise at both locations that had been stolen from the retailer. 

On May 10th, Cook County Sheriff’s Police Officers, in conjunction with agents from the USDA and the Cook County Department of Revenue, conducted simultaneous search warrants at Lox Foods, LNR Family Store, and Sam’s Pantry.  Another five people were arrested, and thousands of dollars in stolen merchandise was seized.  Investigators from the Cook County Department of Revenue issued more than $10,000 in citations to Lox Foods and LNR for violating the cigarette tax.  Walgreens investigators assisted with the identification of stolen items.

Cook County Sheriff’s Police detectives worked with the State's Attorney's Organized Retail Theft Task Force to bring felony charges against all ten defendants.  The investigation into LINK card fraud across the area is continuing.

Ahmad Alshwayyat Issa Hatter Jayantilal Patel Kanu Desai Khalil Haddad Malek Malkawi Nabil Abdelrahaman Ricardo Cardenas Taru Desai Yasier Hadidi

Sheriff Dart thanked the Sheriff’s police detectives who tirelessly worked this case, along with investigators who assisted from the USDA, the Cook County Department of Revenue, and Walgreens’ Organized Retail Crime Division. 

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