Milwaukee convenience store owner faces federal SNAP fraud case involving $1.6 million and tax charges

Federal case outlines alleged trafficking of food assistance benefits at North Side store

A Milwaukee-area convenience store owner has agreed to plead guilty in a federal case alleging a multi-year scheme that improperly obtained more than $1.6 million from the Supplemental Nutrition Assistance Program (SNAP), a federal program designed to help low-income households purchase food.

Nael Jabbar, 47, is accused of exchanging SNAP benefits for cash at a discounted rate through Hot Spot Supermarket, located at 2643 W. Atkinson Ave. Court records describe conduct spanning roughly 2021 through 2024. Under the alleged method, customers’ electronic benefits were processed as if they were used for eligible food purchases, while customers instead received cash that was less than the transaction amount. Prosecutors say the store then received reimbursement for the full value, generating an illicit spread between the reimbursed amount and the cash paid out.

Money flows, spending allegations, and separate tax count

Prosecutors allege Jabbar obtained approximately $1,610,700 in SNAP funds to which he was not entitled and moved proceeds from the business’s bank accounts into personal accounts. The plea agreement also references alleged personal spending, including payments toward loans and credit cards, retail purchases including luxury goods, and payments tied to a vacation club membership.

In addition to the SNAP-related wire fraud count, the plea agreement includes a charge related to filing a false tax return. The government alleges false filings for tax years 2020, 2021, and 2022 that resulted in an estimated loss to the Internal Revenue Service exceeding $87,000.

• Defendant: Nael Jabbar, 47
• Business named in filings: Hot Spot Supermarket, 2643 W. Atkinson Ave., Milwaukee
• Alleged SNAP loss amount: about $1.61 million (2021–2024)
• Alleged tax loss amount: more than $87,000 (tax years 2020–2022)

Procedural posture and potential penalties

Jabbar signed the plea agreement on Feb. 6, 2026, and is scheduled to be arraigned and formally enter a guilty plea on March 17, 2026. Sentencing would occur after a guilty plea is entered and a presentence investigation is completed.

In federal court, maximum statutory penalties can be substantial in fraud and tax cases; the plea agreement notes the possibility of a prison sentence exceeding 20 years and fines that may exceed $250,000, though any actual sentence would be determined by a federal judge under applicable statutes and sentencing guidelines.

Local context: licensing actions and store status

Separately from the federal case, municipal records and prior licensing proceedings show the business faced scrutiny related to alcohol sales. In 2023, the Milwaukee Common Council imposed a short-term suspension of the store’s alcohol license after incidents documented in police reports were reviewed in a licensing process. By 2024, city meeting records reflected that a renewal application connected to the business was held while the applicant was expected to withdraw.

The case underscores ongoing enforcement efforts targeting SNAP trafficking, a form of fraud in which benefits intended for groceries are converted into cash through improper retail transactions.

The criminal case remains pending until the court accepts a plea and enters judgment.