In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 05-2209 & 05-2591

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

ABDUL KARIM ALHALABI,

Defendant-Appellant.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 CR 971—Matthew F. Kennelly, Judge.

____________

ARGUED NOVEMBER 29, 2005—DECIDED APRIL 11, 2006

____________

Before MANION, WILLIAMS, and SYKES, Circuit Judges.

MANION, Circuit Judge. Abdul Alhalabi owned a grocery

store in Chicago. Most of the store’s income came from

transactions with customers using food stamps. The government started investigating Alhalabi after his store reported

unusually large food stamp benefit redemptions. Through

its efforts, the government determined that Alhalabi was

illegally paying his customers cash for their benefits in an

amount well below their face value. The government

revoked Alhalabi’s participation in the food stamp program

but did not bring charges for wire and food stamp fraud

until nearly five years later. After a five-day trial, a jury
2 Nos. 05-2209 & 05-2591

convicted Alhalabi on three counts of wire fraud and three

counts of food stamp fraud, and he was sentenced to fortyone months’ imprisonment. Alhalabi appeals his conviction.

We affirm.

I.

Holyland Foods, Inc. (“Holyland”), a Chicago grocery

store owned by Abdul Alhalabi, began participating in the

federal food stamp program in 1993. While the United States

Department of Agriculture (“USDA”) provides food stamp

benefits, the Illinois Department of Human Services administers the program in Illinois. The food stamp program

allows eligible recipients to use vouchers to buy certain

types of staple food, such as grains, meat, dairy, and

poultry, from authorized stores. The owners of authorized

stores must go through an application process and training,

during which they learn that they are forbidden from

trading food stamps for cash. After training, the USDA

sends an investigator to conduct an inspection of the store

and then decides whether to authorize that store.

Holyland’s applications to the USDA detailed Holyland’s

operation. In the initial 1993 application, Alhalabi, identified

as the president of Holyland, stated that the store had one

cash register and no optical scanners. The application

further stated that the store was stocked with household

supplies and a range of foods including breads, dairy, fresh

produce, poultry, fish, meat, and eggs. He estimated that

Holyland would have annual gross sales of $240,000 and

that approximately $190,000 of this amount would come

from food sales. After a store inspection, Holyland received

its authorization in November 1993.
Nos. 05-2209 & 05-2591 3

In 1996, Alhalabi applied for reauthorization of Holyland’s participation in the program. Alhalabi still listed

himself as the president, though the gross sales (for the 1995

tax year) had increased to $367,000, with eligible food sales

accounting for $300,000 of the total. Alhalabi indicated that

in 1995 Holyland had accepted $280,000 worth of food

stamps. Holyland was reauthorized in December 1996.

In 1997, the food stamp program in Illinois underwent

a major change, replacing the existing regime in which

paper food stamp coupons were used to obtain food. In its

place, Illinois adopted an electronic system in which each

person eligible for food stamp benefits had an individual

account to which benefits were added once a month. The

electronic system, which was named the LINK system,

made use of a plastic card (the “LINK card”), similar to an

ATM card, which was swiped at a point of sale device

(the “POS”) in an authorized store. The food stamp recipient

would then enter a PIN code, and the amount of the sale

would be deducted from his account balance. The LINK

card also could be used to obtain cash if the card owner

participated in the Illinois cash assistance program, which

is not related to food stamps. Because this appeal centers on

the technicalities of the LINK system and how it relates to

the elements of the crime, a detailed description of the

operation is helpful.

After a recipient used his LINK card, a retailer received

payment through an entirely automated process. For the

years 1997 and 1998, Illinois contracted with a company

named Transactive, based in Austin, Texas, to administer

these payments to retailers. Transactive, in turn, used services provided by National City Bank in this operation. National City offered a type of electronic funds transfer, the

automated clearing house (“ACH”) program. This computer
4 Nos. 05-2209 & 05-2591

program compiled the daily LINK card transactions at

Transactive, and sent the data to National City, which

automatically transmitted payment to the appropriate

retailer bank accounts using the Federal Reserve system.

Examining the ACH process in greater detail, the program

involved Transactive computers automatically bundling all

the information received from Illinois LINK card transactions into an ACH file. The ACH file was created on a daily

basis (at 2 p.m.) and included the amounts of all LINK

transactions in Illinois for each authorized location’s

preceding business day. As Transactive received all LINK

transactions, the file could contain amounts of both food

stamp transactions and Illinois cash assistance. The file also

included the bank information for both Transactive and the

authorized retailers that were to receive payment. Once the

ACH file had been created for a day, Transactive’s computers automatically transmitted the information to its concentrator bank, National City, which was located in Kalamazoo,

Michigan.

The ACH file received by National City contained information on multiple retailers—whichever stores had LINK

transactions during their preceding business day. National

City’s ACH computer program then sorted the retailers into

those which had bank accounts with National City and

those that did not. For those with bank accounts outside

National City, the ACH program transmitted payments to

each retailer according to the dictates of the National

Automated Clearinghouse Association. Basically, this meant

that the ACH program forwarded each store’s account

information to the Federal Reserve computer system, which

automatically determined the tracking/ routing number of

the retailer’s bank account and then sent the transaction

information to the retailer’s bank. The end result was that
Nos. 05-2209 & 05-2591 5

1 Transactive theoretically could have stopped a retailer payment

by calling National City before the file was transmitted to the

Federal Reserve.

the retailer’s bank posted the amount of the transaction. In

other words, the retailer was paid. This process utilized no

human interaction after the swipe of the LINK card and the

entering of the PIN number, relying instead on computers

for the interstate routing and transmission of funds.1

 In

other words, once the LINK card was swiped at the site of

the retail transaction, it set off a chain reaction of the events

described above that ended with a deposit in the retailer’s

bank account.

Holyland, like other participating Illinois stores, switched

from paper food stamps to the LINK system in 1997.

Holyland’s annual food stamp redemptions in the three

years prior to this change were relatively constant: $137,723

in 1994; $201,457 in 1995; and $216,181 in 1996. The food

stamp redemptions jumped significantly, however, once

Illinois made the switch to the LINK system. In 1997,

Holyland redeemed a total of $1,028,015 in food stamp

benefits. Beginning in May of that year, the monthly

food stamp redemptions shot up from $22,285 to approximately $184,000 in October. The pattern of increased activity

continued unabated in 1998, during which time Holyland

accepted a total of $1,032,778.26 through the first half of

October. The LINK card transaction records from Holyland

reflect that, during 1997 and 1998, Holyland repeatedly

processed multiple, large food stamp transactions within

mere seconds of each other despite its lack of multiple cash

registers or optical scanners.

The jump in redemptions at Holyland did not pass

unnoticed. The government suspected that Holyland was
6 Nos. 05-2209 & 05-2591

trading cash for benefits. As mentioned previously, trading food stamp benefits for cash is illegal, but the incentive to cheat is high for both a store owner and a food stamp

recipient. In a typical trade, the food stamp recipient accepts

cash, albeit a discounted amount, in exchange for the ability

to spend the proceeds without restriction. For example, a

store owner might agree to give a recipient $50 cash for $100

in benefits. This gives the recipient cash to use on anything

(instead of staple foods), while the store owner gets reimbursed from the government for significantly more than his

actual outlay.

Acting on its suspicions, the government began an

investigation, sending in multiple undercover agents to try

to exchange food stamp benefits for cash. The first undercover agent posed as a welfare recipient in March 1998,

but the cashier at Holyland refused to trade cash for benefits. This reluctance was short-lived, as a Holyland cashier

began trading cash for benefits with a second undercover

agent, Mireille Swain, in April. Swain received $80 cash for

$125 in benefits on April 3 and $100 cash for $150 in benefits

on April 8, as well as conducting other trades later that

month. The investigation eventually culminated in the

government’s removal of Holyland’s POS device on October

10, 1998. Alhalabi claimed that the increase in food stamp

redemptions was the result of high meat sales from

Holyland’s meat counter and the closing of a nearby

supermarket.

After the seizure of Holyland’s POS device, the government left the case dormant for nearly five years. On

October 8, 2003, the grand jury returned a six-count wire

fraud and food stamp fraud indictment relating to payments

to Alhalabi from October 8 to October 10, 1998, charging

violations of 18 U.S.C. § 1343 and 7 U.S.C. § 2024(b). Before
Nos. 05-2209 & 05-2591 7

2 Alhalabi’s argument was rooted in the fact that the government

did not charge the actual swipes of the LINK card in the indictment. These swipes, as noted before, occurred on October 7-9,

1998. Had the government charged the swipes, it likely would

have violated the five-year statute of limitations, at

least regarding the October 7 swipe, as the grand jury did

not return the indictment until October 8, 2003.

and during trial, Alhalabi argued that the conduct charged

in the indictment, which referenced the bank payments he

received and not the swipes of the LINK cards, could not

constitute food stamp or wire fraud under the language of

each of the relevant statutes.2

 The district court at first

reserved ruling on this issue.

At trial, the government called a number of witnesses,

including Special Agent Swain, as well as a former employee who had traded cash for benefits, and various food

stamp recipients who had traded benefits for cash. The

government also introduced testimony from representatives

of the USDA, Transactive, and National City, who explained

how the ACH computer program worked from card swipe

to final payment. After hearing from such representatives,

the district court found that the indictment was sufficient.

The jury convicted Alhalabi on all six counts, and he was

sentenced to forty-one months in prison.

II.

Alhalabi pursues challenges to his conviction in

scattershot fashion. First, Alhalabi renews his contention

that the indictment fails to charge any offenses. Alhalabi

argues that the bank payments referenced in the indictment do not suffice to show food stamp fraud as defined by
8 Nos. 05-2209 & 05-2591

the food stamp statute. He further contends that the wire

fraud counts in the indictment are insufficient. Building off

of this theory, Alhalabi asserts that the jury instructions

regarding the various counts, as well as the eventual verdict,

were fundamentally flawed because of these defects. Next,

Alhalabi argues that the district court erred by granting the

government’s motion to strike surplusage on the wire fraud

counts. Alhalabi also suggests that the district court constructively amended the indictment through a number of its

actions, including the admission of evidence of some LINK

transactions from outside the period of the indictment and

the motion to strike surplusage. Finally, he claims that the

district court erred in admitting (and denying his motion to

strike) certain evidence of fraudulent LINK transactions

outside the period charged in the indictment.

A.

1.

As an initial point, Alhalabi opposes the indictment on the

grounds that it failed to properly charge either wire or food

stamp fraud. We review a district court’s denial of a motion

to dismiss an indictment de novo. See United States v. Wilson,

437 F.3d 616, 619 (7th Cir. 2006). While an indictment must

allege the elements of an offense to be valid, it is not

necessary to spell out each element if each is present in

context. See United States v. Westmoreland, 240 F.3d 618, 633

(7th Cir. 2003). “The test for determining the sufficiency of

the indictment is whether the indictment sets forth the

elements of the offense charged and sufficiently apprises the

defendant of the charges to enable him to prepare for trial.”

Id. (quoting United States v. Garcia-Geronimo, 663 F.2d 738,

743 (7th Cir. 1981)).
Nos. 05-2209 & 05-2591 9

We first address Alhalabi’s belief that the indictment

failed to charge wire fraud. Alhalabi did not develop this

argument in his initial brief before this court, raising it in

a meaningful way only in his reply brief, so it is waived. See

Harper v. Vigilant Ins. Co., 433 F.3d 521, 528 (7th Cir. 2005)

(“The argument is more developed in [the] reply brief, but

this is too little, too late, for ‘arguments raised for the first

time in a reply brief are [also] waived.’ ”); see also United

States v. Williams, 436 F.3d 767, 769 (7th Cir. 2006); United

States v. Stevens, 380 F.3d 1021, 1024-25 (7th Cir. 2004). Even

if this argument were not waived, Alhalabi’s theory would

still fail. “To secure an indictment for mail or wire fraud, the

government was required to show probable cause to believe

that the defendant: (i) participated in a scheme to defraud;

(ii) acted with intent to defraud; and (iii) used the mail or

wires in furtherance of the fraudulent scheme.” United States

v. Vincent, 416 F.3d 593, 600 (7th Cir. 2005); 18 U.S.C. § 1343.

Here, the allegations in the indictment set forth all three

elements, explaining the fraudulent scheme and describing

wires that brought Alhalabi his final ill-gotten gains. The

district court correctly denied Alhalabi’s motion to dismiss

the indictment on the mail fraud counts.

Moving to Alhalabi’s challenge to the food stamp fraud

counts, Alhalabi relies on a narrow reading of the food

stamp statute, which provides that “whoever knowingly

uses, transfers, acquires, alters, or possesses coupons,

authorization cards, or access devices in any manner

contrary to this chapter” is guilty of a felony. 7 U.S.C.

§ 2024(b). Although we have in the past used this section to

punish store owners who, like Alhalabi, traded cash for

paper coupons, see United States v. Barnes, 117 F.3d 328 (7th

Cir. 1997), Alhalabi claims a distinction between payments

into a bank account as a result of food stamp fraud (as

included in this indictment) and food stamp coupons (as
10 Nos. 05-2209 & 05-2591

3 While we reject Alhalabi’s argument, the government

could have avoided any issues had it not flirted dangerously

(continued...)

defined by the statute). Alhalabi contends that the food

stamp statute does not punish what was charged in this

indictment. As in the trial court, Alhalabi argues that a

swipe is all that is needed for food stamp fraud under the

LINK system. Under this reading, the statute of limitations

would disqualify the charges arising from the October 7

swipe.

Alhalabi’s argument, however, lands wide of the mark.

The food stamp statute punishes the transfer and acquisition

of food stamp benefits, casting a broad net to include as

coupons both “electronic benefit transfer card[s]” as well as

“cash or check issued in lieu of a coupon.” 7 U.S.C.

§ 2012(d). For each of three dates, the indictment states

that Alhalabi “did knowingly acquire, transfer, and

possess United States Department of Agriculture Electronic Transfer Card benefits, namely LINK benefits having

a value more than $100, . . . [and that] he knowingly and

unlawfully caused an electronic payment of [the relevant amount for that date]” into his bank account. The

payments are simply the end manifestation of the food

stamp benefits—the same thing at a later stage. They are

part of one seamless transaction, and the indictment charges

that transaction. Alhalabi rails against considering these

payments as benefits, but he offers no compelling reason to

distinguish them. The LINK system simply combines the

various elements of the paper system— exchange of the

benefits, possession, and redemption—into one. We have no

difficulty in concluding that the indictment sufficed under

2024(b).3
Nos. 05-2209 & 05-2591 11

3 (...continued)

close to the limitations deadline. This led to an awkward indictment that failed to charge the most conceptually accessible part

of the transaction—when Holyland employees swiped the LINK

cards and traded cash for the benefits. The cardholder got

immediate cash, while the store owner had to wait. But the swipe

set in motion a process that did not end until the money was in

the bank. The government could charge at any point from swipe

to deposit under the statute.

4 Alhalabi mentions that the “wire fraud instructions were

similarly erroneous” in his initial brief without any further

argument. It is difficult to understand precisely what this

cryptic reference means, given the vast difference between the

elements of wire and food stamp fraud. Without necessary

elaboration, this argument is waived. Even if it were not

waived, the district court accurately instructed the members of

the jury on what they needed to find for wire and food stamp

fraud.

2.

Piggybacking off of this argument, Alhalabi challenges the

district court’s jury instructions relating to the food stamp

fraud counts.4

 We review jury instructions de novo to

determine whether they provide fair and accurate summaries of the law. See United States v. Stewart, 411 F.3d 825, 827

(7th Cir. 2005); United States v. Tingle, 183 F.3d 719, 729 (7th

Cir. 1999). “Looking at the charge as a whole, we must

determine whether the instruction misled the

jury concerning the issues or its duty in relation to those

issues.” See Tingle, 183 F.3d at 729.

In relevant part, the district court instructed the jury

that to convict Alhalabi, it had to find: “First, that the

defendant knowingly acquired Link [sic] card benefits in a

manner contrary to law and, second, that the amount
12 Nos. 05-2209 & 05-2591

5 Alhalabi also raises a sufficiency of the evidence challenge

to the verdicts. As the later challenge proceeds along precisely the

same track as his challenge to the denial of the motion for

acquittal, we need not address it separately.

acquired exceed $100. . . . Under the law, Link [sic] card

benefits may only be exchanged for eligible food and may

not be exchanged for cash.” As in his argument regarding the indictment, Alhalabi faults the district court for

not distinguishing the bank payments from paper food

stamp coupons. The district court, however, was correct to

treat them as one transaction. The district offered an

accurate summary of the law and properly directed the jury

in its consideration of the issues.

3.

Alhalabi also contends that the district court erred in its

denial of his motion for acquittal after the jury verdict on

both the wire and food stamp fraud counts.5

 We review

such a denial de novo, asking “whether the evidence

presented, when viewed in the light most favorable to the

government, could support any rational trier of fact’s

finding of all the essential elements of the crime beyond a

reasonable doubt.” United States v. Brown, 328 F.3d 352,

355 (7th Cir. 2003). We will reverse only if the record is

devoid of evidence from which a jury could conclude

guilt beyond a reasonable doubt. See id.

This challenge comprises the third in Alhalabi’s trilogy of

objections to the charged conduct. In this recitation, he

argues that, as the bank payment wires that were

charged did not constitute illegal offenses, the jury could not

have properly convicted him. Alhalabi again is mistaken;
Nos. 05-2209 & 05-2591 13

the government put forward sufficient evidence on both the

wire and food stamp fraud counts to secure a conviction. A

Holyland employee testified that he traded cash for benefits

from the LINK card and food stamp recipients confirmed

that Holyland paid them for such benefits. The government

introduced testimony from the USDA, Transactive, and

National City to explain how the swipe of the LINK card

automatically results in the transfer of benefits to a retailer

file and eventually payment into a retailer’s bank account.

Confirming the testimony of the Transactive employee, the

government introduced evidence of both the relevant LINK

card swipes and the eventual payment into Alhalabi’s

account of the amounts of the food stamp benefits. The jury

had reasonable evidence from which it could conclude that

Alhalabi was guilty beyond a reasonable doubt on each

count.

B.

Next, Alhalabi argues that the district court erred in

granting the government’s motion to strike the various

amounts referenced in the food stamp fraud counts. An

amendment or change to an indictment will be “allowed to

stand if it does not change an ‘essential’ or ‘material’

element of the charge so as to cause prejudice to the

defendant.” United States v. Cina, 699 F.2d 853, 857 (7th Cir.

1983). A material element of the crime is one whose specification with precise accuracy is necessary to establish the

illegality of the behavior and the court’s jurisdiction. See id.;

see also United States v. Clark, 943 F.2d 775, 783 (7th Cir.

1991); United States v. Muhammad, 928 F.2d 1461, 1470 (7th

Cir. 1991).

The exact amounts of the payments were not material

elements of the charges. The government charged Alhalabi
14 Nos. 05-2209 & 05-2591

with fraudulently obtaining food stamp benefits, which

resulted in the automatic payment into his bank account of

certain sums several days later. The exact sums listed in the

indictment were not necessary to these charges. What

mattered was that he illegally possessed food stamp benefits

(for which he received payment), not the inner workings of

the payment system. Alhalabi does not contend that these

wires reimbursed him for something other than the swipes

of the LINK cards several days earlier or were less than one

hundred dollars. His challenge on this ground, therefore,

fails.

C.

Alhalabi further asserts that several of the district

court’s actions amounted to a constructive amendment of

the indictment. Combining several of his prior arguments,

Alhalabi finds fault in: (1) the presentation of evidence

about wires not charged in the indictment; (2) testimony

about uncharged food stamp fraud; (3) the introduction of

the payments into his bank account, which he contends

could not be considered food stamp benefits; and (4)

improper jury instructions. We review whether a district

court constructively amended the indictment de novo.

United States v. Trennell, 290 F.3d 881, 886 (7th Cir. 2002);

see also United States v. Pigee, 197 F.3d 879, 885 (7th Cir.

1999). “Constructive amendment of the indictment can

occur ‘when either the government (usually during its

presentation of evidence and/or its argument), the court

(usually through its instructions to the jury), or both,

broadens the possible bases for conviction beyond those

presented by the grand jury.’ ” United States v. Jones, 418

F.3d 726, 729 (7th Cir. 2005) (quoting United States v.

Cusimano, 148 F.3d 824, 829 (7th Cir. 1998)). Constructive
Nos. 05-2209 & 05-2591 15

amendments are forbidden as they violate the guarantees of

the Fifth Amendment. See United States v. Murphy, 406 F.3d

857, 860 (7th Cir. 2005).

No constructive amendment occurred in this case. We

briefly address each of Alhalabi’s contentions, three of

which we have already rejected and all of which we reject in

this context. First, the government’s presentation of wires

not expressly mentioned before the grand jury did not affect

the scope of the indictment. At trial, the government offered

evidence about fraudulent food stamp transactions that

directly resulted in payment to Alhalabi’s bank account. The

government simply supplied more technical details that

easily fit with the allegations in the indictment. The introduction of the complete ACH system did not contradict or

change in any substantive way what had been presented to

the grand jury, and thus, was not a constructive amendment. See Trennell, 290 F.3d at 888.

Second, Alhalabi argues that the entry of evidence of

conduct occurring prior to the crimes charged amended

the indictment by allowing the jury to convict for uncharged

acts, in particular the LINK swipes of October 7-9. The

admission of evidence intricately related to the charged

crimes (the remaining parts of the LINK system) does not

constructively amend the indictment. See, e.g., United States

v. Johnson, 248 F.3d 655, 665 (7th Cir. 2001); Cusimano, 148

F.3d at 829. Here, the government presented evidence

intricately related to the crimes charged to paint for the jury

the complete picture of the scheme and Alhalabi’s actions.

This did not alter the crimes from the ones described in the

indictment.

Third, Alhalabi contends that the payments into his bank

account that were charged in the indictment did not constitute any crime and, therefore, the indictment must have
16 Nos. 05-2209 & 05-2591

been de facto amended to support the verdict. As explained

before, each count properly charged one transaction, not

multiple transactions, in which Alhalabi possessed the

electronic coupon benefits and which resulted in the

payment of money into the bank account. This fully stated

the crimes of food stamp fraud and wire fraud.

Fourth, Alhalabi asserted that, by omitting his narrow

reading of food stamp benefits, the district court crafted

improper jury instructions. However, the district court

properly viewed this as a seamless transaction and delivered instructions that properly summarized the law.

No error occurred.

D.

Finally, we examine Alhalabi’s claim that the district court

erroneously admitted evidence of prior food stamp fraud

outside the charged time period. Alhalabi filed both a

motion in limine and a motion to strike such evidence, both

of which the district court denied. Before this court, Alhalabi

suggests that these rulings contravened Federal Rule of

Evidence 403, as the unfair prejudicial impact outweighed

the evidence’s probative value. We review the district

court’s denials for an abuse of discretion. See United States v.

Griffin, 194 F.3d 808, 822 (7th Cir. 1999) (denial of motion in

limine); United States v. Bucey, 876 F.2d 1297, 1314-15 (7th

Cir. 1989) (denial of motion to strike surplusage).

The district court acted properly. In the present case, the

government introduced evidence of a long-running scheme

by Holyland Foods to abuse the LINK card system by

trading cash for benefits. The evidence explained, from the

perspective of a store employee, food stamp program

recipients, and undercover investigators, the ins and outs of
Nos. 05-2209 & 05-2591 17

this fraud. This evidence had extremely high probative

value. Looking at the other side of the Rule 403 ledger, there

is nothing about this evidence that bears the hallmarks of

unfair prejudice. See United States v. Connelly, 874 F.2d 412,

418 (7th Cir. 1989) (“Evidence is considered unfairly prejudicial, not merely because it damages the opposing party’s

case, but its admission makes it likely that the jury will be

induced to decide the case on an improper basis, commonly

an emotional one, rather than on the evidence presented on

the crime charged.”) (internal citations omitted). Alhalabi

failed, in both his briefs and at oral argument, to introduce

any compelling reason that would suggest the jury would

be confused or “incited” to decide this case on an improper

basis. We conclude, therefore, that the district court did not

abuse its discretion when denying Alhalabi’s various

motions opposing the admission of this evidence.

III.

Alhalabi engaged in food stamp and wire fraud on the

dates alleged in the indictment, October 8-10, 1998. The

indictment crafted by the government, while not ideal,

was sufficient. The district court properly ruled on the

various challenges to the indictment and evidentiary issues,

and we, therefore, AFFIRM.
18 Nos. 05-2209 & 05-2591

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-02-C-0072—4-11-06