EVERETT — A downtown store owner accused of running a food stamp fraud ring has been sent to prison and was forced to forfeit more than $410,000.
Fraz “Tony” Mushtaq will get to keep his Everett home in an agreement reached with federal prosecutors, according to court documents. He forfeited all money seized from multiple bank accounts. Prosecutors alleged it was the profit of a criminal enterprise.
The forfeiture settlement came after Mushtaq, 36, pleaded guilty in Snohomish County Superior Court to multiple counts of trafficking in food stamp benefits and attempted trafficking in stolen property. He also admitted to possessing illegal “spice,” a synthetic drug.
Judge George Bowden last month sentenced Mushtaq to a year and four months in prison. The judge declined the defense’s request for a first-time offender waiver, which would have spared Mushtaq any prison time.
Mushtaq and his business, A-1 Smoke and Grocery, were at the center of a 17-month investigation by Everett police. Officers raided the store in February 2014, arrested Mushtaq and searched his home. The city also deemed the business a chronic nuisance.
Prosecutors alleged that he was buying food stamp benefit cards for cents on the dollar and using the cards to purchase inventory for his store.
A confidential informant working with police accompanied Mushtaq to big grocery stores where he directed the informant to purchase dozens of cases soda pop with his EBT card.
Mushtaq later paid the man in cash, about half the price of what the informant was charged at the grocery store.
In one instance, Mushtaq became nervous after a cashier made a comment about the informant buying $132 worth of Pepsi “using government food stamps,” according to court papers.
Prosecutors allege that Mushtaq bought what he believed was stolen cigarettes and energy drinks for a fraction of the fair market value and reselling the goods at his store, court papers said.
Theft investigators at an Everett Safeway and QFC also reported that shoplifters said that they were stealing from the stores to sell the merchandise to Mushtaq for a fraction of the price, court papers said.
Investigators suspected that he was making hundreds of thousands of dollars off of his scheme and laundering the money through his business. They also suspect that he under-reported his earnings to the Internal Revenue Service.
Mushtaq is originally from Pakistan but has lived in the U.S. for years.