Milwaukee Grocery Owner Pleads Guilty to $1.6 Million SNAP Fraud Scheme

MILWAUKEE — Nael Jabbar, 47, owner of Hot Spot Supermarket at 2643 W. Atkinson Ave., pleaded guilty April 14, 2026, in federal court to one count of wire fraud and one count of filing a false tax return for defrauding the Supplemental Nutrition Assistance Program (SNAP) of more than $1.6 million from 2021 to 2024.

Jabbar, who also lives in Franklin, Wisconsin, owned and operated the store since 2005 and was authorized to accept SNAP benefits. He signed agreements to comply with program rules but instead ran a classic trafficking scheme: SNAP recipients handed over their EBT benefits in exchange for cash — typically about 50 cents on the dollar — while Jabbar billed the federal government for the full food purchase amount.

Prosecutors say the scheme generated $1,610,702.92 in improper SNAP payments to which Jabbar was not entitled. He used the fraud proceeds to pay personal loans and credit cards, fund a vacation club membership, and make purchases at stores including Target, Gucci, and Nordstrom.

This type of retailer-driven SNAP trafficking — exchanging benefits for cash at a steep discount while claiming full reimbursement — remains widespread, especially among smaller independent stores. Older USDA estimates placed national trafficking rates around 1-1.6%, with rates significantly higher (up to 10%) at small retailers compared to large supermarkets. Recent data shows billions in overall SNAP losses from trafficking, skimming, and improper claims, costing taxpayers and diverting aid from intended recipients.

Jabbar faces up to 20 years in prison on the wire fraud count and additional penalties on the tax charge. Sentencing is scheduled for July 28, 2026. The store is now closed.

For hardworking American families and taxpayers funding the SNAP program, cases like this highlight ongoing vulnerabilities in benefit integrity and the need for stronger oversight to protect limited public resources.