Dollar-Store Owner Pleads Guilty to Food Stamp Fraud

A Somerset man who owned dollar stores in Newark and other towns admitted Wednesday to defrauding the federal food-stamp program by accepting the benefit cards as payment for items other than food, the Essex County Prosecutor’s Office said.

Muhammed Farooq, 49, has agreed to forfeit more than $800,000 but still faces a $5 million lawsuit from the US Department of Agriculture, which administers the food stamp program. He pleaded guilty in Essex County Superior Court to one count of theft by deception.

He faces seven years in prison when he is sentenced on Jan. 6. He is currently free on $250,000 bail.

“The food stamp program is designed to help struggling families. By misusing the program, this defendant and the food stamp recipients who participated in this illegal scheme are stealing taxpayer money. We take these violations of the law seriously and will continue to crack down on those engaged in this kind of theft, ’’ said Deputy Chief Assistant Prosecutor Walter J. Dirkin, who is in charge of the Financial Crimes Unit of the Essex County Prosecutor’s Office and prosecuted the case.

For two and a half years beginning in November 2010, Farooq illegally accepted food stamps for items at four different dollar stores he owned: Dollar Class at 119 Broad St. in Elizabeth; Dollar Industry at 771 Broad St., Newark; Dollar Time at 829 South Orange Avenue in East Orange; and Dollar Worth at 729 Broad St. in Newark.