“Money Laundering” and “Food Stamp Fraud”—Guilty Plea

Mahmoud “Mike” Salti Jr., has pleaded guilty “to money laundering in what federal prosecutors said was a $24 million food stamp fraud scheme.”^[1] Mr. Salti and his uncle, Mohammed Salti, “ran nine grocery stores on the city’s east side in the 1980s.”^[2] They were accused of buying food stamps from recipients at about 75% of face value, and “then redeeming them for full value from the government through stores they controlled.”^[3]

This scheme ended in 1994, and the men deeded their homes to the wives and fled to Jordan in 1996, just before they were indicted.^[4] In 1997, Jordan refused to extradite them because the extradition treaty had not been ratified in Jordan when they were arrested; Mahmoud Salti returned to the US to be with his family, while his uncle remains in Jordan.^[5]

It should be noted that the public discourse about this case, such as it is, says that Mr. Salti pleaded guilty to money laundering and food stamp fraud. He didn’t. He pleaded guilty to conspiracy and filing false income tax returns.^[6] It’s a minor point, but it has huge sentencing implications. Sentencing is scheduled for May 5, 2006.^[7]

Conspiracy carries a punishment of up to 5 years in prison and filing false income tax returns carry a potential prison sentence of up to 3 years. Money laundering, however, carries a potential punishment of up to 20 years in prison, and food stamp fraud (7 U.S.C. § 2024(b)(1)) also carries a potential prison sentence of up to 20 years in prison. Clearly, while no charges would have been better, it is more advantageous to have been charged with conspiracy and false income tax filings, rather than money laundering and food stamp fraud.

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[1] Former Cleveland Grocer Admits Food-Stamp Fraud, Associated Press (via Columbus Dispatch), Feb. 16, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] See United States v. Salti, No. 1:96-cr-00153, (N.D. Oh. 2006) (available through ECF). (In fact, Mr. Salti’s docket sheet does not even allege money laundering or food stamp fraud.)
[7] Id.