USDA Employee and Five Others Charged in Food Stamp Fraud That Generated Over $66 Million in Unauthorized Transactions
The U.S. Attorney's Office for the Southern District of New York, in Manhattan, New York County, New York, announced on May 29, 2025, the unsealing of a superseding indictment charging six individuals in connection with a sprawling fraud and bribery scheme that generated over $66 million in unauthorized transactions under the Supplemental Nutrition Assistance Program (SNAP), known as food stamps. Prosecutors called it one of the largest food stamp frauds in U.S. history.
The defendants are Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, Emad Alrawashdeh and Arlasa Davis. Davis, a U.S. Department of Agriculture (USDA) employee, is additionally charged with bribery and honest services fraud. The case is assigned to U.S. District Judge Jed S. Rakoff.
"Michael Kehoe and his co-conspirators misappropriated tens of millions of dollars in taxpayer funds meant to help low-income families put food on the table," said Perry Carbone, Attorney for the United States, acting under authority conferred by 28 U.S.C. § 515. "This fraud was made possible when USDA employee Arlasa Davis betrayed the public trust by selling confidential government information to the very criminals she was supposed to catch. Their actions undermined a program that vulnerable New Yorkers depend on for basic nutrition." Charmeka Parker, Special Agent in Charge of the USDA Office of Inspector General, thanked law enforcement partners for pursuing allegations against government employees who use their positions in schemes exploiting taxpayer-funded programs. Christopher G. Raia, Assistant Director in Charge of the FBI's New York Field Office, said Davis allegedly abused her position and privileged access to confidential government databases to assist her co-conspirators in exploiting SNAP, driving tens of millions of dollars in fraudulent transactions, and that the FBI will never tolerate exploitation of federal financial assistance for personal reward.
According to the indictment, SNAP uses federal tax dollars to help low-income households buy food. Recipients use Electronic Benefit Transfer (EBT) cards, similar to debit cards, at participating stores, which receive license numbers from the USDA and use special EBT terminals; when a card is swiped, the system verifies the transaction and transfers the corresponding federal funds to the store's bank account. Starting in 2019, Kehoe allegedly orchestrated a network that supplied approximately 160 unauthorized EBT terminals to stores across the New York area to illegally process more than $30 million in EBT transactions. Working with Nawafleh, Omar Alrawashdeh, Obaid and Emad Alrawashdeh, he allegedly submitted approximately 200 fraudulent USDA applications, misappropriating USDA license numbers and in some cases doctoring documents, to obtain EBT terminals for unauthorized stores, including smoke shops and other ineligible businesses.
Critical to the scheme, prosecutors say, was Davis, a longtime USDA employee who worked within the very division responsible for identifying SNAP fraud. She allegedly abused her privileged access to federal systems to sell hundreds of EBT license numbers enabling over $36 million in fraudulent SNAP redemptions at unauthorized stores. She allegedly photographed handwritten lists of license numbers intended for qualifying stores with her personal cellphone and funneled them to an intermediary who sold them to co-conspirators including Nawafleh, Omar Alrawashdeh, Emad Alrawashdeh and Obaid. In return, she allegedly received substantial bribes disguised in communications as, among other things, "birthday gifts" and "flowers."
Kehoe, 46, is from Long Island, New York; Nawafleh, 34, Omar Alrawashdeh, 37, Obaid, 39, and Emad Alrawashdeh, 37, are from the Bronx, New York; and Davis, 56, is from Gardiner, New York. Each is charged with one count of conspiracy to steal government funds and misappropriate USDA benefits (maximum five years), one count of theft of government funds (maximum 10 years) and one count of misappropriation of USDA benefits (maximum 20 years). Davis is additionally charged with conspiracy to commit bribery (maximum five years), bribery (maximum 15 years) and conspiracy to commit honest services wire fraud (maximum 20 years); Nawafleh is additionally charged with failure to appear (maximum 10 years). The maximum sentences are prescribed by Congress and are provided for information only; any sentencing will be determined by the judge. The case is being handled by the office's General Crimes Unit, with Assistant U.S. Attorneys Georgia V. Kostopoulos and Joe Zabel in charge of the prosecution; the USDA and the FBI conducted and assisted the investigation. The charges in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. (Source: U.S. Attorney's Office for the Southern District of New York)
Source: U.S. Attorney's Office for the Southern District of New York
Published by GSM · USA (original Chinese edition)
Photo: 图：位于华盛顿的美国农业部总部大楼（资料图）。本案被告之一是农业部雇员，案件由该部监察长办公室参与调查。公共领域，经四级固定图库联邦核心包。 / Photo: The U.S. Department of Agriculture headquarters building in Washington, D.C. (file photo). One defendant is a USDA employee and the department's Office of Inspector General took part in the investigation. Public domain, via the federal-core asset pack.
