A federal employee and five other people have been charged in connection with a widespread fraud scheme targeting the Supplemental Nutrition Assistance Program, also known as food stamps.
A Department of Justice news release called the operation a “sprawling fraud and bribery scheme that generated over $66 million in unauthorized transactions.”
“This is one of the largest food stamp frauds in U.S. history,” the release said.
Defendants Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, Emad Alrawashdeh and Arlasa Davis, all of New York state, are accused of “conspiracy to steal government funds and to misappropriate U.S. Department of Agriculture benefits,” the release said.
Davis also faces one count of theft of government funds, one count of misappropriation of USDA benefits, one count of conspiracy to commit bribery, one count of bribery, and one count of conspiracy to commit honest services wire fraud. If convicted on all counts, Davis could face a maximum of 75 years in prison.
“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,” U.S. Attorney Perry Carbone said.
“Their actions undermined a program that vulnerable New Yorkers depend on for basic nutrition.”
According to the indictment, stores that were not on the official list of stores eligible to have Electronic Benefits Transfer terminals to dispense SNAP benefits were allowed to get them through the scheme.
“Some of the defendants personally owned or controlled some of the retail stores for which they facilitated the provision of the EBT terminals. As a result, those defendants received a portion of the unauthorized SNAP benefits those stores redeemed,” the indictment said.
Is welfare fraud a major problem?
“In exchange for facilitating the provision of EBT terminals to retail stores that were not owned or controlled by any of the defendants, the defendants extracted commissions, cash payments, and other fees from those stores,” the indictment explained, noting that in total, about 160 unauthorized EBT terminals existed.
Because the process for operating SNAP requires a Food and Nutrition Service number, the scheme needed a person on the inside to supply those to what was referred to in the indictment as the FNS Broker.
“From at least in or about 2022 through at least in or about March 2025, Davis received cash bribes from the FNS Broker in exchange for Davis abusing her privileged access to USDA databases to misappropriate hundreds of FNS numbers,” the indictment said.
“The FNS Broker then sold those misappropriated FNS numbers to store owners and others … The misappropriated FNS numbers Davis provided to the FNS Broker enabled the defendants to obtain additional unauthorized EBT terminals for themselves, their retail stores, and others.”
The release linked Davis to $36 million in fraudulent benefits being paid out.
BREAKING: 6 people including a USDA employee BUSTED in a $66 MILLION food stamp fraud scheme!
Arlasa Davis, a USDA employee responsible for identifying SNAP fraud allegedly SOLD hundreds of EBT numbers enabling over $36 million in fraudulent SNAP redemptions at unauthorized… pic.twitter.com/zqdWp7EdyR
— Libs of TikTok (@libsoftiktok) May 29, 2025
The release said the scheme began in 2019 with a focus on the New York City area.
Agriculture Secretary Brooke Rollins said the Trump administration has declared open season on fraud, according to Fox Business.
“At [the] USDA, we are hyper-focused … on rooting out that waste, fraud and abuse, and… yesterday was, if not the largest, one of [the] largest stings,” she said.
“So we’re going to move forward, obviously in partnership with the FBI, with the Department of Justice, of course our team at USDA. This is not the ‘one and only,’” Rollins said. “There are going to be many more to come, and we’re gonna make sure that we’re delivering on our promises to the taxpayers.”
“It’s just the tip of the spear. We’re trying to lock it down right now to ensure that it doesn’t keep happening. But when you’ve got employees that basically don’t follow the law, then we’ve got to fix it, and that’s what we’re doing. There’s going to be real consequences for breaking the law across America’s federal government with President Trump, but this is just one of many more to come.”
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