Prosecutors say the scheme steered $1.6 million in food benefits into cash and personal purchases.
MILWAUKEE, Wis. — The owner of a Milwaukee convenience store has agreed to plead guilty in a federal case that prosecutors say siphoned more than $1.6 million from the Supplemental Nutrition Assistance Program by swapping food benefits for cash at a discount.
Nael Jabbar, 47, is expected to formally enter his plea on March 17 in federal court after signing a plea agreement tied to two charges: wire fraud and filing a false tax return. The case centers on Hot Spot Supermarket on Milwaukee’s northwest side and alleges losses to both the SNAP program and the IRS, with the government seeking repayment and penalties.
Federal prosecutors say Jabbar ran the scheme from 2021 through 2024 at Hot Spot Supermarket, 2643 W. Atkinson Ave., in the Garden Homes area. Under the plan described in court records, customers used Wisconsin’s Quest EBT cards at the store and received cash instead of groceries. Prosecutors say the cash paid out was less than the benefit amount, while the store submitted transactions for the full value and kept the difference. In the plea agreement, Jabbar agreed he received about $1,610,702.92 in SNAP benefits he was not entitled to.
Investigators say the money did not stay in the store’s accounts. Prosecutors allege Jabbar moved funds from Hot Spot’s business bank accounts into personal accounts and then used the proceeds to cover private expenses. Among the spending listed in court filings were payments toward personal loans and credit cards, along with purchases at retail stores including Target, Gucci and Nordstrom. Prosecutors also say he made payments to Unlimited Vacation Club, described in records as a travel membership program offering discounted rates and perks at resort properties.
The criminal case also includes tax allegations that extend beyond the SNAP transactions. Prosecutors say Jabbar filed false federal tax returns for 2020, 2021 and 2022, producing an IRS loss of more than $87,000. The charge tied to the tax filings is separate from the wire fraud count but is connected in the plea agreement, which lays out potential penalties that can include prison time, supervised release and financial restitution. Court records in the case describe the tax filings as part of a broader pattern in which Jabbar allegedly underreported or misstated income linked to the store’s operations.
The store itself has been closed, and neighbors have described seeing federal agents execute search activity at the property in earlier stages of the investigation. The business also faced local troubles in recent years, including a liquor license revocation connected to security concerns raised at a city licensing meeting in 2023. Residents in the area have said the corner store was a longtime part of the neighborhood’s routine shopping, adding to the attention on the case as it moved from investigation to federal court filings and a negotiated plea.
SNAP, formerly known as food stamps, is a federally funded program intended to help low-income families buy food, and retailers must follow strict rules to accept benefits. Prosecutors say trafficking cases like Jabbar’s typically rely on transaction patterns, bank records and interviews, along with store footage or on-site evidence gathered during search warrants. In this case, the government alleges a multi-year run of transactions that did not match normal grocery purchases and that, instead, were structured to convert benefits into cash while billing the program for the full amount.
Jabbar’s plea agreement outlines the stakes he faces if the court accepts his guilty plea. Prosecutors say the wire fraud count carries the possibility of a lengthy federal prison sentence and a fine that can exceed $250,000, with the final outcome left to a judge applying federal sentencing guidelines. Financial penalties can also include restitution tied to the SNAP losses and the tax loss, along with forfeiture actions meant to recover proceeds traced to the scheme. The government’s filings describe the SNAP total as more than $1.6 million over roughly three years.
In the weeks ahead, the case is expected to shift from investigation details to sentencing preparation. Jabbar is scheduled to be arraigned and formally enter his plea on March 17, a court date that typically triggers deadlines for a presentence report and filings from prosecutors and defense attorneys. Any sentencing date would be set later, after those reports and arguments are completed and the judge reviews the agreed facts and disputed issues.
For now, Jabbar remains set to appear in court in March, with prosecutors seeking to lock in the guilty plea and move toward restitution. The next major milestone is the March 17 hearing, when he is expected to admit the conduct described in the plea agreement.
Author note: Last updated February 13, 2026.