Government’s Position with Respect to Sentencing — United States v. Jibril (Dkt. 32, D. Minn.)

Summary

The government's position with respect to sentencing in United States v. Hared Nur Jibril, Criminal No. 21-239 (ECT), in the U.S. District Court for the District of Minnesota, filed March 22, 2022 as Doc. 32. It states that Jibril owns Hormud Meat and Grocery Market in St. Cloud, Minnesota, and that he and his employees exchanged customers' food assistance benefits for cash, phone minutes, wire transfers and other unauthorized items. Jibril pleaded guilty on December 1, 2021 to an information charging conspiracy to commit wire fraud and wire fraud. The government puts the loss at approximately $3,324,945.56 in SNAP benefits and an estimated $830,330.16 in WIC benefits, and asks for a sentence of 30 months' imprisonment. The nine-page memorandum is signed by Assistant U.S. Attorney Sarah E. Hudleston.

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CASE 0:21-cr-00239-ECT Doc. 32 Filed 03/22/22 Page 1 of 9




                     UNITED STATES DISTRICT COURT
                        DISTRICT OF MINNESOTA
                         Criminal No. 21-239 (ECT)

 UNITED STATES OF AMERICA,                )
                                          )
                    Plaintiff,            )
                                          )    GOVERNMENT’S POSITION
       v.                                 )    WITH RESPECT TO
                                          )    SENTENCING
 HARED NUR JIBRIL,                        )
                                          )
                    Defendant.            )


      Mr. Jibril is the owner of Hormud Meat and Grocery Market in St. Cloud,

Minnesota. He and his employees regularly exchanged customers’ food assistance

benefits for cash, phone minutes, international wire transfers and other unauthorized

items. On December 1, 2021, Mr. Jibril pleaded guilty to an information charging

Conspiracy to Commit Wire Fraud in violation of 18 U.S.C §§ 1343 and 1349 and

Wire Fraud in violation of 18 U.S.C. § 1343. For the reasons set forth below, the

government believes that a sentence of 30 months incarceration is sufficient and

appropriate in this case and respectfully requests the Court impose such a sentence.

                                 BACKGROUND

      Mr. Jibril opened the Hormud Meat and Grocery Market (“Hormud”) in 2009

to sell food, products, phone cards, and money transfer services in St. Cloud,

Minnesota. Mr. Jibril owned and ran the store and regularly worked as a cashier. Plea

Agreement ¶ 2. He was consistently self-employed at Hormud from 2009 through the

present.

           CASE 0:21-cr-00239-ECT Doc. 32 Filed 03/22/22 Page 2 of 9




      SNAP and WIC fraud

      Right away, in 2009, Mr. Jibril applied for authorization for Hormud to accept

federal food assistance benefits, and was accepted into the Supplemental Nutritional

Assistance Program, known as SNAP. PSR ¶ 10. The USDA established SNAP to

help low-income families obtain nutritious food at approved retail stores. PSR ¶ 7. As

such, SNAP benefits may only be exchanged for eligible food items. Id. Stores may

not give customers cash, cigarettes, non-food products or other ineligible items; owners

and employees of SNAP-authorized stores must certify that they understand and will

abide by these rules.    Id. In his SNAP application, Mr. Jibril certified that he

understood that exchanging cash for food stamps was illegal. Id. In January 2018, Mr.

Jibril signed a reauthorization application certifying, among other things, that he

would “accept responsibility on behalf of [Hormud] for violations of the Supplemental

Nutrition Assistance Program regulations, including those committed by any of the

firm’s employees, paid or unpaid, new full-time or part-time.” Id. The materials

explained that these violations included but were “not limited to: Trading cash for food

stamp benefits (i.e. trafficking); Accepting food stamp benefits as payment for

ineligible items; Accepting food stamp benefits as payment on credit accounts or loans;

Knowingly accepting food stamp benefits from people not authorized to use them.”

Id.

      In 2009 Mr. Jibril also applied and received authorization for Hormud to accept

WIC benefits. WIC, the Special Supplemental Nutrition Program for Women, Infants

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and Children, was created by the USDA to provide supplemental foods and other

assistance to pregnant, postpartum, and breastfeeding women, infants, and children

from families with inadequate income. WIC benefits may only be used at authorized

retailers and only for specific foods with targeted nutrition for pregnant women and

children. Id. Between 2009 and 2020, Mr. Jibril periodically signed and submitted

WIC vendor retail agreements promising that he would not exchange WIC benefits

for any cash, non-food items or food items other than the WIC-allowed foods specified

on the customer’s WIC account. Id.

      In or about 2018, the FBI got a tip that Hormud was trafficking SNAP benefits

for cash and other items. PSR ¶ 11. Working with confidential informants,

investigators recorded undercover transactions at Hormud that confirmed the fraud.

Id. ¶ 12. Investigators also reviewed USDA data and saw that Hormud’s average

monthly redemptions for SNAP transactions were way above what would be expected

for a store the size of Hormud. Id. ¶ 11. An analysis of WIC metrics likewise revealed

numbers and patterns inconsistent with lawful WIC acceptance. Id. WIC records

showed grossly elevated average transaction amounts, especially given the store’s

small size, and anomalous customer patterns and distance of travel, with many

customers coming from great distances and bypassing large retailers with much better

food selections. The Minnesota WIC program audited Hormud and found that the

market lacked 58.8% of the inventory it claimed to have sold for WIC benefits during

the audit month. PSR ¶ 11. This audit was very conservative in favor of Hormud

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because WIC looked only at seven foods,1 rather than all WIC-eligible foods carried,

and presumed an ending inventory of zero for each one, such that it presumed all the

targeted products were sold to WIC customers (i.e., none to non-WIC customers).

        Additionally, investigators did surveillance and repeatedly saw customers go

into Hormud and leave with no bags or food despite USDA records showing the

customers’ SNAP cards being processed for a purchase. Id. ¶ 12. When agents

executed search warrants for Hormud and Mr. Jibril’s adjacent restaurant, they found

dozens of SNAP and WIC EBT cards in other people’s names. Id. In SNAP and WIC

fraud cases, store owners often give customers cash or items on credit, hold onto their

cards, and then run the SNAP or WIC cards through the system once they are reloaded

with the benefits.

        To assess loss, Special Agent Todd Bucci compared SNAP redemptions at

Hormud to those at three St. Cloud stores similar to Hormud in size and category

(ethnic grocery), between February 13, 2018, and August 5, 2021 (from the first to the

last undercover transaction). The difference between Hormud’s total transactions and



1
    The audited foods were:
      Similac Advance infant formula – 12.4 ounce powder
      Kemps 1% milk – one gallon containers
      Old Orchard Apple Juice – 64 ounce containers
      Mom’s Best Quick Oats – 16 ounce containers
      Kellogg’s Special K cereal – 12 ounce boxes
      Kellogg’s Corn Flakes cereal – 12 ounce boxes
      Crystal Farms Cheddar Jack Shredded Cheese – 8 ounce packages

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           CASE 0:21-cr-00239-ECT Doc. 32 Filed 03/22/22 Page 5 of 9




the average of the totals at the three comparable stores resulted in a loss amount of

approximately $3,324,945.56 in SNAP benefits. PSR ¶ 12. Extrapolation of the WIC

audit results led to a WIC estimated loss of $830,330.16. Id. Both are highly

conservative measures because they included only the period during which undercover

transactions occurred and because the WIC audits made assumptions and limitations

favoring Hormud, as described above.

       Unemployment Insurance Fraud

       During the investigation of SNAP and WIC fraud at Hormud, investigators saw

unemployment insurance payments going into Mr. Jibril’s bank account in 2020. They

discovered that Jibril had filed for unemployment insurance pursuant to Minnesota’s

COVID-19 economic assistance. PSR ¶ 13. Unemployment insurance, or UI, is a joint

state and federal program run in Minnesota by the Department of Employment and

Economic Development (DEED). PSR ¶ 9. UI provides cash payments to eligible

workers who have lost their jobs or full employment. Id. As a result of the COVID-19

pandemic and attendant economic crisis, the federal government provided significant

supplemental benefits to states’ UI programs. Id. To receive such UI benefits,

applicants had to certify to DEED that they had lost employment due to the pandemic.

Id. Authorized recipients received cash payments on a weekly basis, either through

direct deposit or on a debit card. Id.

       On March 29, 2020, Mr. Jibril applied for UI, claiming he was a cashier who

had been laid off by Hormud due to the pandemic. PSR ¶ 12. He claimed he was not

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           CASE 0:21-cr-00239-ECT Doc. 32 Filed 03/22/22 Page 6 of 9




self-employed. Id. DEED accepted his application and Mr. Jibril received a total of

$32,724 in unemployment assistance between March 29, 2020, and August 1, 2020,

all while owning, operating, and working at Hormud. Id. During this time, Hormud

was doing full business and in fact processed substantially more SNAP and WIC

transactions than during the same period in 2019.

                                       GUIDELINES

      The parties agree with the Guidelines calculations of the PSR, and the

government asks the Court to adopt the same. The PSR found Mr. Jibril’s total offense

level to be 22, based on the loss amount of $4,187,999.72. PSR ¶ 28; Plea Agreement

¶¶ 7b, 10. It determined his criminal history category to be I, resulting in an advisory

Guidelines range of 41 to 51 months’ imprisonment. PSR ¶¶ 35, 59; Plea Agreement

7f.

                                    ARGUMENT

      As the Court well knows, it must determine what constitutes a sufficient

sentence as guided by the factors of Title 18, United States Code, Section 3553(a). In

view of the aggravating and mitigating facts of this case as applied to the factors of

Section 3553(a), the government submits that a term of imprisonment of 30 months is

appropriate.

      Mr. Jibril committed consistent, blatant, substantial fraud against programs

designed to ensure that disadvantaged individuals and families have enough nutritious

food to eat. By allowing customers to use their SNAP and WIC benefits for cash,

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            CASE 0:21-cr-00239-ECT Doc. 32 Filed 03/22/22 Page 7 of 9




phone cards, and other unauthorized merchandise, Mr. Jibril drove abundant foot

traffic to his store, profiting from the government’s generosity. Mr. Jibril and Hormud

created a culture of food benefit fraud that exploited important and laudable programs,

including one created to provide basic nutrition to pregnant women and young

children. By normalizing this conduct, Mr. Jibril undermined public confidence in the

SNAP and WIC programs and disadvantaged Hormud’s competitors who played by

the rules. Mr. Jibril’s conduct contributed to and encouraged the SNAP and WIC

fraud that is pervasive among small grocery stores, fraud that threatens the benefits of

those who truly need and rely on them. This is serious conduct that deserves serious

sanction.

      But Mr. Jibril did not stop there. He also applied for COVID unemployment

insurance, pretending to be a laid-off clerk, as his store surpassed its SNAP and WIC

sales of 2019. While COVID crushed many companies and businesses, it also brought

a boom to others like Amazon, Target, and grocery stores, which now had people’s

dining out dollars coming through their doors. From March 29, 2019, to August 1,

2019, Hormud ran $241,773.71 in SNAP sales and $ 93,348.36 in WIC sales. From

March 29, 2020, to August 1, 2020, the time during which Mr. Jibril was receiving

unemployment payments, Hormud had $552,360.33 in SNAP transactions and

$128,480.30 in WIC transactions. So, Mr. Jibril was simultaneously taking

government aid for the unemployed and making more money at his store than he did

the year before.

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      In sum, Mr. Jibril committed a lot of fraud against benefits designed to feed

needy people. When audited, Hormud only had 42% of the items it claimed it sold to

WIC customers, meaning at least 58% of those benefits were exchanged for cash or

other things. Each such transaction is a lie, as each requires putting false information

into the cash register so that it appears to be a SNAP- or WIC-eligible product. And

this happened again and again, essentially allowing customers to use Hormud like an

ATM with their SNAP and WIC cards. Were it not for Mr. Jibril’s immediate and

fulsome acceptance of responsibility, the government would ask for a sentence in the

middle of the Guidelines range.

      The government instead seeks a sentence three levels below that range because

Mr. Jibril, once caught, did everything right. He agreed to plead guilty to an

information covering all his fraud and sparing significant government resources. He

was cooperative with all aspects of the case including restitution, appears genuinely

contrite, and provided his financial records and forms promptly without even being

reminded (a rather rare occurrence). These countervailing considerations deserve

credit and, along with his lack of criminal record and positive community engagement,

call for a downward variance. Furthermore, the government believes that Mr. Jibril

now understands the seriousness and wrongfulness of his actions and that his felony

conviction and loss of SNAP and WIC business, on top of a term of imprisonment,

will be sufficient to deter him from committing this crime in the future. While certainly

not a defense or an excuse, it is also notable that, unlike many SNAP-fraud defendants,

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Mr. Jibril did not appear charge his customers a “fee” for the illegal SNAP

transactions, but rather provided cash or items in the same value as the SNAP benefits

redeemed.

      Based on the totality of the circumstances in this particular case, the Section

3553(a) factors support a downward variance and a sentence of 30 months.

Additionally, restitution is mandatory under 18 U.S.C. § 3663A, and the USDA

should be awarded full restitution for the losses it sustained because of defendant’s

fraud. Here, restitution and loss amount are one and the same and the parties agree

Mr. Jibril owes $32,724 to the Minnesota Department of Employment and Economic

Development and $4,155,275.72 to the USDA ($3,324,945.56 for SNAP and

$830,330.16 for WIC). Plea Agreement ¶ 10.

                                   CONCLUSION

      Based on the foregoing, it is the position of the United States that a sentence of

30 months’ imprisonment is sufficient but not greater than necessary to effect the goals

of the relevant sentencing factors of 18 U.S.C. § 3553(a).

Dated: March 22, 2022                          Respectfully Submitted,

                                               CHARLES J. KOVATS, JR.
                                               Acting United States Attorney

                                               s/ Sarah E. Hudleston

                                               BY: SARAH E. HUDLESTON
                                               Assistant U.S. Attorney
                                               Attorney ID No. 0351489


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