59-year-old Rajan Babbar, an Indian-origin owner of a medium-sized grocery store in Lynchburg, Virginia, has pleaded guilty to one count of fraud involving the federal government’s food stamp program SNAP and one count of transacting in criminally derived property. His store Taste of India was registered as a SNAP retailer in 2016, which means SNAP beneficiaries could get groceries from his store using their SNAP benefits, for which the store would get reimbursed by the government — as the SNAP beneficiaries do not pay to the store. Around April 2021, his SNAP sales exploded from the previous levels. Court documents said that in 2018, Taste of India was conducting an approximate monthly average of $2,600 in SNAP transactions. In 2018, Taste of India was conducting an approximate monthly average of $2,600 in SNAP transactions. By 2023, the approximate monthly average was $65,000 a month, a roughly 2,500 percent increase.Babbar admitted that he permitted SNAP beneficiaries to exchange their SNAP benefits for cash, which means he made false transactions in their names and then provided cash to them — one-half the value of the SNAP benefits. The store then got full reimbursement from the government. Between approximately January 2019 and January 2025, Babbar conducted numerous such fraudulent SNAP transactions in an amount that was more than $550,000 but not greater than $3.5 million.SNAP trafficking is a federal crime as SNAP funds are taxpayer money and any fraud against it is against the US government.
Suspicious activity, undercover investigation
In 2018, the Food and Nutrition Service of the administration noticed that Taste of India had some unusual activity with its food stamp redemptions. It was placed on a watch list. Scrutiny of Taste of India led to a civil investigation and penalty in 2020. On four out of five separate encounters between March 2019 and February 2020, undercover investigators with FNS made unauthorized purchases of ineligible items using SNAP EBT cards, primarily for cosmetic and hygiene products. Based on that, FNS determined that Taste of India was in violation of program rules. Babbar ultimately paid a $1,932 civil penalty in lieu of a six-month disqualification. However, he was allowed to continue to operate as a SNAP retailer.But then they noticed the redemptions seemed unusually high for this type of store and location. In 2023, undercover investigations began. On three occasions between April and September 2023, an undercover source entered Taste of India and attempted to exchange SNAP benefits for cash. On all three occasions, Babbar agreed to the exchange and provided cash to the undercover source. No product or merchandise was sold.
