A superseding indictment unsealed today has charged six individuals, including a U.S. Department of Agriculture (USDA) employee, in connection with an alleged sprawling fraud and bribery scheme that generated over $66 million in unauthorized transactions under the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. This massive fraud is being described as one of the largest food stamp frauds in U.S. history.
The U.S. Attorney’s Office for the Southern District of New York, represented by Perry Carbone, acting under the authority of 28 U.S.C. § 515, announced the charges alongside Charmeka Parker, Special Agent in Charge of the USDA Office of Inspector General (USDA-OIG), and Christopher G. Raia, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI).
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The defendants—Michael Kehoe, 46, of Long Island, New York; Mohamad Nawafleh, 34, of the Bronx, New York; Omar Alrawashdeh, 37, of the Bronx, New York; Gamal Obaid, 39, of the Bronx, New York; Emad Alrawashdeh, 37, of the Bronx, New York; and Arlasa Davis, 56, of Gardiner, New York—are all charged with conspiracy to steal government funds and to misappropriate USDA benefits. Davis, a USDA employee, faces additional charges of bribery and honest services fraud. The case has been 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,” stated U.S. Attorney Perry Carbone. “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. These charges should be a reminder that those who exploit anti-poverty programs for personal gain will be held accountable for their crimes.”
USDA-OIG Special Agent in Charge Charmeka Parker emphasized the collaborative effort in the investigation, stating, “We appreciate the collaboration with our law enforcement partners in pursuing allegations regarding government employees, who use their positions to participate in schemes that exploit taxpayer-funded programs.”
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FBI Assistant Director in Charge Christopher G. Raia highlighted Davis’s alleged role: “Arlasa Davis, a USDA employee, is alleged to have abused her position and privileged access to confidential government databases to assist her co-conspirators in exploiting the SNAP program, driving tens of millions of dollars in fraudulent transactions. This alleged scheme benefited the defendants while undermining critical safeguards designed to ensure that SNAP assistance reaches only eligible families in need. The FBI will never tolerate any individual who exploits federal financial assistance for personal reward.”
According to the indictment and public court proceedings, the SNAP program utilizes federal tax dollars to help low-income households purchase food through Electronic Benefit Transfer (EBT) cards. Participating stores, which receive license numbers from the USDA, use EBT terminals to process transactions.
The alleged scheme, orchestrated by Kehoe starting in 2019, involved a network that supplied approximately 160 unauthorized EBT terminals to stores across the New York area, processing over $30 million in illegal EBT transactions.
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Kehoe, along with co-defendants Mohamad Nawafleh, Omar Alrawashdeh, Obaid, and Emad Alrawashdeh, is accused of submitting around 200 fraudulent USDA applications, misusing USDA license numbers, and doctoring documents to obtain EBT terminals for unauthorized businesses, including smoke shops.
A critical component of the alleged fraud was Arlasa Davis, a long-time USDA employee within the division responsible for identifying SNAP fraud. Davis allegedly abused her privileged access to federal systems, selling hundreds of EBT license numbers that enabled over $36 million in fraudulent SNAP redemptions at unauthorized stores.
She is accused of photographing handwritten lists of license numbers intended for qualifying stores with her personal cellphone and funneling them to an intermediary.
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This intermediary then allegedly sold them to co-conspirators, including Nawafleh, Omar Alrawashdeh, Emad Alrawashdeh, and Obaid, who used these numbers to fraudulently obtain EBT terminals for stores not authorized by the USDA to process SNAP transactions. In exchange, Davis reportedly received substantial bribes disguised as “birthday gifts” and “flowers.”
All six defendants face one count of conspiracy to steal government funds and misappropriate USDA benefits, carrying a maximum sentence of five years in prison; one count of theft of government funds, with a maximum sentence of 10 years; and one count of misappropriation of USDA benefits, with a maximum sentence of 20 years.
Additionally, Davis is charged with one count of conspiracy to commit bribery (maximum five years), one count of bribery (maximum 15 years), and one count of conspiracy to commit honest services wire fraud (maximum 20 years). Nawafleh also faces one count of failure to appear, which carries a maximum sentence of 10 years.
Congress prescribes the maximum sentences in this case.
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