In a stunning revelation that may cause many to question the integrity of public service, the U.S. Attorney’s Office for the Southern District of New York announced on Thursday a major bust involving a veteran USDA employee and five accomplices, marking one of the most significant food stamp fraud schemes ever uncovered in the United States.
During a press conference, U.S. Attorney Perry Carbone, alongside Charmeka Parker from the USDA Office of Inspector General, and Christopher G. Raia of the FBI, disclosed that a superseding indictment was unsealed, targeting six individuals linked to a fraudulent scheme exceeding $66 million under the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as the food stamp program.
The indicted parties—Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, Emad Alrawashdeh, and Arlasa Davis—are facing multiple charges, including conspiracy to misappropriate government funds and USDA benefits. Notably, Davis, an employee of the USDA, was part of the very division tasked with identifying SNAP fraud.
According to the Attorney’s Office, Kehoe established a network in 2019 that distributed around 160 illegal Electronic Benefit Transfer (EBT) terminals to various stores in the New York area, which facilitated the theft of over $30 million in EBT transactions. With the assistance of co-conspirators Nawafleh, Alrawashdeh, Obaid, and Emad Alrawashdeh, Kehoe submitted about 200 fraudulent USDA applications, misused USDA license numbers, and even forged documentation to obtain EBT terminals for ineligible businesses.
Among these businesses were smoke shops and other enterprises that clearly did not meet USDA eligibility requirements.
Davis played a pivotal role in this elaborate fraud. The Southern District of New York’s Attorney’s office emphasized that she exploited her position by selling hundreds of EBT license numbers. “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,” Carbone stated. He added that Davis’s betrayal of public trust was particularly egregious, as she sold confidential information to the very individuals she was meant to apprehend.
In total, Davis’s actions enabled over $36 million in fraudulent SNAP redemptions at unauthorized establishments. In a particularly brazen move, she photographed handwritten lists of license numbers intended for qualifying stores using her personal cell phone and transmitted these to an intermediary, who then sold them to her co-conspirators.
“Their actions undermined a program that vulnerable New Yorkers depend on for basic nutrition,” Carbone noted. “These charges should serve as a stark reminder that individuals who exploit anti-poverty programs for personal gain will face justice.”
The six defendants are each charged with conspiracy to steal government funds and misappropriate USDA benefits, with potential prison sentences of up to five years for the conspiracy charge, ten years for theft of government funds, and twenty years for misappropriation of USDA benefits.
Arlasa Davis, age 56, faces additional charges, including conspiracy to commit bribery, which could lead to five years in prison, and a bribery charge that might result in a fifteen-year sentence. If convicted on all counts, she could face a lifetime behind bars.
