MONEY LAUNDEROR FOR CRACK DEALERS PLEADS GUILTY
Alex S. Gabor
May 24, 2007
A Pasadena man who owned several markets in the “skid row” area of downtown Los Angeles has pleaded guilty to defrauding the federal Food Stamp Program out of more than $6 million by purchasing benefits for 50 cents on the dollar.
Drug dealers and addicts who sought ways to purchase dope from street dealers would apply for food stamps and general relief and then use the money in addition to other illegal activities needed in order to feed their habits.
Tigran Malkhasyan, 42, recently pleaded guilty to five criminal charges before United States District Judge S. James Otero. Malkhasyan specifically pleaded guilty to conspiracy, wire fraud, food stamp fraud, money laundering and making false statements to the United States Department of Agriculture.
Drug dealers would send their customers who needed cash to his stores and “cash in” their food stamps, then use the cash to buy crack, pot, crystal meth, heroine, cocaine and other illegal pharmaceutical drugs.
A second defendant who works at one of Malkhasyan’s stores, Karine Atikyan, 39, of Pasadena, pleaded guilty on Monday, admitting that she committed conspiracy, wire fraud and food stamp fraud.
Many drug addicts, once they start the dwindling spiral of drug addiction, find all kinds of ways to survive, including abusing the food stamp program.
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.
In Los Angeles County, drug addicts usually wind up in the Los Angeles County Jail System run by Sheriff Bratton, through its gateway, the Men’s Central Jail, which is the most dangerous jail in the nation according to a study commissioned by the Los Angeles County Board of Supervisors in 2005
The study recommended that Men’s Central Jail be shut down and rebuilt to address security concerns.
To date nothing has been done about the conditions that have led to more than 8 deaths in the past six years, let alone the riots and beatings that occur on a daily basis but which the general mainstream media only reports on once in a while when someone does get seriously hurt. The jail system in Los Angeles County hosts well over 200,000 drug addicts on a revolving basis annually.
Malkhasyan, who owned 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, purchased and authorized employees such as Atikyan to purchase benefits.
During a series of undercover operations at Malkhasyan’s stores, federal government agents simply sold the benefits on EBT cards for half of their face value. Drug addicts have been selling their food stamp benefits through the EBT card system for well over a decade not only to Malkhasyan, but to other independently owned grocery stores in Los Angeles County.
Malkhasyan subsequently redeemed all of the Food Stamp benefits through his participation in the Food Stamp Program or at other retail outlets, according to court documents.
Malkhasyan’s four stores had redeemed more than $10 million worth of Food Stamp benefits over the past several years, and investigators believe that nearly two-thirds of those figures are fraudulent transactions.
The scheme was shut down when Malkhasyan was arrested last November. It took the government at least three years to collect enough evidence to prosecute. This is very inefficient justice. Speed of justice is necessary for the growth of a sane civil society.
Malkhasyan and Atikyan are scheduled to be sentenced by Judge Otero on September 24. At sentencing, Malkhasyan faces a maximum statutory sentence of 60 years in federal prison, and Atikyan could be sentenced to as much as 30 years in prison.
As part of a plea agreement with the government, Malkhasyan has agreed to forfeit well over $100,000 and a 2006 Mercedes-Benz. If he gets 30 years, he will be out on parole in five years or less, so what happened to the rest of the money he stole and laundered? The justice department would not say, nor were any officials available to provide that information for the general public at this time.
The case was the result of an ongoing investigation by the Office of Inspector General for the United States Department of Agriculture. Officials from OIG were not available to comment either on what happened to the six million dollars which was laundered through Malkhasyan’s stores or when that information would be made available to the public.
Thom Mrozek, Public Affairs Officer for the United States Attorney’s Office provided information on behalf of the United States Justice Department for this story. Copyright © 2007 by Alex S. Gabor. All Rights Reserved!
Drug dealers and addicts who sought ways to purchase dope from street dealers would apply for food stamps and general relief and then use the money in addition to other illegal activities needed in order to feed their habits.
Tigran Malkhasyan, 42, recently pleaded guilty to five criminal charges before United States District Judge S. James Otero. Malkhasyan specifically pleaded guilty to conspiracy, wire fraud, food stamp fraud, money laundering and making false statements to the United States Department of Agriculture.
Drug dealers would send their customers who needed cash to his stores and “cash in” their food stamps, then use the cash to buy crack, pot, crystal meth, heroine, cocaine and other illegal pharmaceutical drugs.
A second defendant who works at one of Malkhasyan’s stores, Karine Atikyan, 39, of Pasadena, pleaded guilty on Monday, admitting that she committed conspiracy, wire fraud and food stamp fraud.
Many drug addicts, once they start the dwindling spiral of drug addiction, find all kinds of ways to survive, including abusing the food stamp program.
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.
In Los Angeles County, drug addicts usually wind up in the Los Angeles County Jail System run by Sheriff Bratton, through its gateway, the Men’s Central Jail, which is the most dangerous jail in the nation according to a study commissioned by the Los Angeles County Board of Supervisors in 2005
The study recommended that Men’s Central Jail be shut down and rebuilt to address security concerns.
To date nothing has been done about the conditions that have led to more than 8 deaths in the past six years, let alone the riots and beatings that occur on a daily basis but which the general mainstream media only reports on once in a while when someone does get seriously hurt. The jail system in Los Angeles County hosts well over 200,000 drug addicts on a revolving basis annually.
Malkhasyan, who owned 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, purchased and authorized employees such as Atikyan to purchase benefits.
During a series of undercover operations at Malkhasyan’s stores, federal government agents simply sold the benefits on EBT cards for half of their face value. Drug addicts have been selling their food stamp benefits through the EBT card system for well over a decade not only to Malkhasyan, but to other independently owned grocery stores in Los Angeles County.
Malkhasyan subsequently redeemed all of the Food Stamp benefits through his participation in the Food Stamp Program or at other retail outlets, according to court documents.
Malkhasyan’s four stores had redeemed more than $10 million worth of Food Stamp benefits over the past several years, and investigators believe that nearly two-thirds of those figures are fraudulent transactions.
The scheme was shut down when Malkhasyan was arrested last November. It took the government at least three years to collect enough evidence to prosecute. This is very inefficient justice. Speed of justice is necessary for the growth of a sane civil society.
Malkhasyan and Atikyan are scheduled to be sentenced by Judge Otero on September 24. At sentencing, Malkhasyan faces a maximum statutory sentence of 60 years in federal prison, and Atikyan could be sentenced to as much as 30 years in prison.
As part of a plea agreement with the government, Malkhasyan has agreed to forfeit well over $100,000 and a 2006 Mercedes-Benz. If he gets 30 years, he will be out on parole in five years or less, so what happened to the rest of the money he stole and laundered? The justice department would not say, nor were any officials available to provide that information for the general public at this time.
The case was the result of an ongoing investigation by the Office of Inspector General for the United States Department of Agriculture. Officials from OIG were not available to comment either on what happened to the six million dollars which was laundered through Malkhasyan’s stores or when that information would be made available to the public.
Thom Mrozek, Public Affairs Officer for the United States Attorney’s Office provided information on behalf of the United States Justice Department for this story. Copyright © 2007 by Alex S. Gabor. All Rights Reserved!