Indio Store Owner Sentenced for Ripping off Government
An Indio store owner who siphoned more than $3.5 million out of the U.S. government’s food stamp program by illegally using benefit cards issued to welfare recipients was sentenced to 3 1/2 years in federal prison.
Haki Dervishi, 58, of Palm Springs pleaded guilty in June to a single charge of illegal trafficking in food stamp benefits. He could have faced up to 20 years in prison had he been convicted by a jury.
U.S. District Judge Virginia Phillips certified the plea agreement, and in addition to the prison term, ordered the defendant to pay full restitution to the government, as well as a $250,000 fine.
After examining Dervishi’s financial situation the court ordered that “All fines are waived as it is found that the defendant does not have the ability to pay a fine in addition to restitution.”
Dervishi will also have to serve three years of supervised probation upon his release from prison, according to the agreement.
“Mr. Dervishi tried to portray himself as a Robin Hood,” Assistant U.S. Attorney Stephen Merrill told City News Service. “But in reality, he was victimizing people. One of the lessons here is that if you abuse the system and take money that doesn’t belong to you, you will be prosecuted.”
Dervishi and his wife, Linda Sue Dervishi, own and operate the One Stop Shoppe food mart, pawn shop and gas station at 84051 Indio Blvd.
He was arrested last November following a nearly yearlong FBI investigation that culminated with the grand jury indictment.
According to the U.S. Attorney’s Office, between January 2010 and October 2012, the defendant bilked the government out of $3,511,878 by making fraudulent withdrawals from the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, managed by the U.S. Department of Agriculture.
Under the program, welfare recipients are allotted a certain sum of money each month to buy food. The allotments are credited to recipients’ Electronic Benefit Transfer cards, which operate similar to a bank debit card. A recipient can use the EBA card at an any USDA-authorized store.
Dervishi’s One Stop Shoppe had been an authorized outlet since 1996. The store maintained a point-of-sale terminal next to the cash register, where recipients could swipe their EBT cards, according to federal documents.
The defendant’s scheme entailed paying welfare recipients cash for their cards, always ensuring a profit to himself, prosecutors said. According to the plea agreement, Dervishi’s going rate for a $75 EBT card was $50 cash, netting him $25 in ill-gotten credit that went directly into his Bank of America account.
The stolen money was designated exclusively for the purchase of food items under the SNAP program.
“He tried to justify his actions by claiming he was providing people who were suffering with gas money or anything else they needed,” Merrill said. “He was leading a very comfortable life. He had multiple properties, including rental homes and a cabin. He owned land out of state and had offshore assets.”
In 2008, One Stop Shoppe’s monthly SNAP food sales averaged $2,125, according to the government. In 2012, they averaged $300,000 a month.
“His greed spiraled out of control. It reached a level of abandonment,” Merrill said.
He said Dervishi’s wife was not an active participant in the scheme. Several store clerks were involved, but they acted on Dervishi’s orders and never profited, according to the prosecutor.
Dervishi was arrested when he paid an undercover investigator with the USDA Office of Inspector General $100 for $151 in SNAP credit, according to court documents.
