Feds: Brothers defrauded US out of $1.3M

generic Gerald R. Ford Federal Building generic federal court

GRAND RAPIDS, Mich. (WOOD) — Five brothers who ran a Grand Rapids grocery store now face six federal charges for allegedly defrauding federal welfare programs out of nearly $1.3 million.

According to federal court documents, Emad Khalil Karaein, Jawad Khalil-Ahmad Karaein, Khader Khalil Karaein, Salah Eddin-Khalil Karaein and Dawood Khalil Karaein are accused of:

  • One count of conspiracy to defraud the United States
  • One count of food stamp fraud
  • One count of WIC fraud
  • Three counts of false statement

The brothers ran the Middle Eastern Market on Eastern Avenue SE north of 28th Street in Grand Rapids’ Alger Heights neighborhood. They were indicted Aug. 5 and arrest warrants were served Aug. 20, at which point the indictment was unsealed.

The brothers allegedly illegally collected $1,278,700 in federal welfare funds between May 2001 and June 2010.

Federal authorities say the brothers did it by letting customers to use their EBT cards — also known as Bridge Cards — and WIC benefits to get cash and buy ineligible items like phone cards, and to pay off credit the brothers had extended to them.

The court documents say the brothers were warned about Bridge Card misuse in August 2006, but that it continued anyway.

Then, federal authorities allege, the brothers lied about the fraud.

The brothers have been ordered to forfeit the $735,855 they allegedly illegally obtained through the food stamp fraud, the court documents show.

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