USDA Employee Charged in $66M SNAP Fraud Scheme

A U.S. Department of Agriculture (USDA) worker and five other individuals are accused in a massive food stamp fraud scheme.

The suspects in the case were identified as Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, Emad Alrawashdeh, and Arlasa Davis, Fox Business reported on Friday.

The United States Attorney’s Office for the Southern District of New York detailed the case in a press release on Thursday, stating officials announced the suspects were charged in connection with a huge fraud and bribery scheme that generated more than $66 million in unauthorized transactions via the Supplemental Nutrition Assistance Program (SNAP) program.

“This is one of the largest food stamp frauds in U.S. history,” authorities said, noting the charges against the suspects included conspiracy to steal government funds and to misappropriate USDA benefits. Davis is the USDA employee, who was charged with bribery and honest services fraud.

The news release offered more details of the allegations:

Starting in 2019, KEHOE 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 his codefendants NAWAFLEH, OMAR ALRAWASHDEH, OBAID, and EMAD ALRAWASHDEH, KEHOE submitted approximately 200 fraudulent USDA applications, misappropriating USDA license numbers and, in some cases, doctoring application documents, to obtain EBT terminals for unauthorized stores—including smoke shops and other ineligible businesses.

Critical to the scheme was ARLASA DAVIS, a longtime USDA employee who worked within the very division of the USDA responsible for identifying SNAP fraud. DAVIS 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. DAVIS 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, who then used those license numbers to fraudulently obtain EBT terminals for stores that were not authorized by the USDA to process SNAP transactions. In return, DAVIS received substantial bribes that were disguised in communications as, among other things, “birthday gifts” and “flowers.”

The news comes as the USDA has been going hard after criminals engaging in SNAP fraud.

During a recent appearance on Fox Business, U.S. Secretary of Agriculture Brooke Rollins said President Donald Trump’s administration is doing things differently than former President Joe Biden (D), under whom the government grew — and along with it, so did cases of fraud.

She said her agency is “hyper-focused on rooting out that waste, fraud, and abuse.” Rollins added that massive fraud such as the recent case “is no longer gonna be allowed” in Washington, DC, including within programs such as SNAP.

She added that officials are going to make sure that “we’re delivering on our promises to the taxpayers.”