American Grocers

Samir Itani got rich sending expired food overseas to U.S. troops in the Middle East.

Worse, Harmon wrote, "the Government, claiming that it did not want to bankrupt [the Itanis] settled this suit for far less than its actual or estimated value and for far less than is customary...even though it allowed the Itanis, who own additional properties, to continue to live in an expensive home in the Memorial section of Houston and to continue in business despite the extensive fraud to which they had pled guilty. The [Department of Justice] did not respond to these criticisms nor present any evidence that [the Itanis] were unable to pay more."

With that, Harmon ordered the government to pay Pallares, and, to date, she has received the first payment on what she's entitled to. She could eventually walk away from the case with close to $4 million.

"I'm glad it's over," Pallares says. "And, yes, I have closure."

American Grocers used acetone, spray paint...
Courtesy of Berg & Androphy
American Grocers used acetone, spray paint...
...and Dremel tools  to remove ­expiration dates from food packaging.
Courtesy of Berg & Androphy
...and Dremel tools to remove ­expiration dates from food packaging.

On December 3 of this year, Itani walked into a federal courtroom in Houston for his criminal sentencing, the last piece in the case against him. Nugent asked the judge to consider some "creative" sentencing, probation perhaps, that would keep Itani out of jail and help the business survive. Itani had never been in trouble, Nugent argued, had paid his restitution and fully cooperated with the government's ongoing investigations into other military food contractors.

"He's a humble man now. He's learned humility from this experience," Nugent told the judge. "He makes no excuses for what he did. He knows what he did was wrong. He's a different person."

The judge asked Itani if he had anything to say to the court before sentencing. He did.

"This case has taught me the difference between punishment and consequences," Itani said. "Punishment is jail time. Consequence is pain and suffering, both emotionally and physically. When my children think about what I've said about right and wrong, they realize that is a lie."

He continued, "My daughter dealt with the fear by running away from home and everything she knows. But she still carries a burden on her shoulders. My oldest son comes home and locks himself in his room. I watch helpless at the shame I put them through. I made them elders before their time. And perhaps the worst of all is one day soon, when I have to sit down with my ten-year-old baby and tell him what his father did. This is the biggest punishment of all."

About 20 of Itani's employees and family members had entered the courtroom during the hearing. Several of them wept.

The judge responded: "Mr. Itani spoke of punishment and consequence, and he gave one of the most eloquent statements I've heard. But these crimes were committed in staggering proportions."

"Understanding consequence isn't about committing a crime until you're caught and then giving all the money back. There's something more involved. It's determination to abide by the law. Not to rip off the government. Not send food to troops that isn't fresh. Not take money from tax payers to line your own pockets."

"I trust you'll do what you said when you get out," the judge concluded. "And live an honorable and law-abiding life."

As quietly as the case started, seven years earlier, it was over. The judge sentenced Itani to two years in prison, most likely a federal prison camp. Itani will spend the holidays with his family, arrange a date with the U.S. Marshals Service to turn himself in, and wait for a car to show up at his home and drive him off to jail.

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