LAWFUEL – Law Jobs, Law News Network – A Pasadena man who owns several markets in Los Angeles was arrested today on federal conspiracy charges for allegedly defrauding the federal Food Stamp Program out of at least $1 million by purchasing benefits for 50 cents on the dollar.
Tigran Malkhasyan, 41, was arrested without incident at a market he owns on Skid Row by special agents with Office of Inspector General for the United States Department of Agriculture and the United States Secret Service.
A second defendant who works at one of Malkhasyan’s stores, Karine Atikyan, 38, of Pasadena, was also arrested today for allegedly participating in the conspiracy.
Malkhasyan and Atikyan are expected to make their initial court appearances tomorrow afternoon in United States District Court in Los Angeles.
The Food Stamp Program, which is designed to allow low-income individuals to purchase food, utilizes an Electronic Benefit Transfer (EBT) System. The EBT system works much like an automated teller machine at a bank, with recipients being able to use a personal identification number to access the benefits provided by the government at authorized food stores.
Malkhasyan, who owns the Hollyfood Mart chain of markets in downtown Los Angeles and South Los Angeles, as well as a store called Alina’s in downtown Los Angeles, allegedly purchased and authorized employees such as Atikyan to purchase benefits. During a series of undercover operations at Malkhasyan’s stores, agents simply sold the benefits on EBT cards for half of their face value. Malkhasyan subsequently redeemed all of the Food Stamp benefits through his participation in the Food Stamp Program or at other retail outlets, according to an affidavit filed in the case.
Investigators who analyzed EBT transactions made at Malkhasyan’s stores have identified $1,135,000 in fraudulent transactions, and they believe they will identify many more. Malkhasyan’s four stores have redeemed more than $10 million worth of Food Stamp benefits over the past several years, although it is unclear how much of that represents fraudulent activity.
The charge of conspiracy carries a maximum statutory penalty of five years in federal prison
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
This case is the result of an ongoing investigation by the Office of Inspector General for the United States Department of Agriculture and the United States Secret Service.
CONTACT: Assistant United States Attorney Douglas A. Axel