Six Charged in $66 Million SNAP Fraud Scheme, One of the Largest in U.S. History

NEW YORK, May 29, 2025 – A longtime U.S. Department of Agriculture (USDA) employee and five others face federal charges in what authorities describe as one of the largest food stamp frauds in American history. The group allegedly orchestrated a sprawling $66 million fraud and bribery scheme targeting the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps, undermining a critical lifeline for low-income families.

The U.S. Attorney’s Office for the Southern District of New York, alongside the USDA Office of Inspector General (USDA-OIG) and the FBI, announced the unsealing of a superseding indictment on Thursday. The defendants—Michael Kehoe, 46, of Long Island, New York; Mohamad Nawafleh, 34, of the Bronx; Omar Alrawashdeh, 37, of the Bronx; Gamal Obaid, 39, of the Bronx; Emad Alrawashdeh, 37, of the Bronx; and Arlasa Davis, 56, of Gardiner, New York—are accused of exploiting SNAP for personal gain through fraudulent transactions and bribery. Each faces charges of conspiracy to steal government funds, theft of government funds, and misappropriation of USDA benefits, carrying potential prison sentences of up to 5, 10, and 20 years, respectively.

According to court documents, Arlasa Davis, a USDA employee tasked with identifying SNAP fraud, abused her access to confidential government databases. She allegedly photographed handwritten lists of license numbers meant for authorized stores and sent them to an intermediary, who sold them to co-conspirators. These numbers were used to obtain Electronic Benefit Transfer (EBT) terminals for unauthorized stores, enabling over $36 million in fraudulent SNAP redemptions. Davis reportedly received bribes disguised as “birthday gifts” and “flowers” for her role.

“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 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.” Carbone emphasized that the scheme undermined a program vital for vulnerable New Yorkers.

FBI Assistant Director in Charge Christopher G. Raia condemned the exploitation, stating, “This alleged scheme benefited the defendants while undermining critical safeguards designed to ensure that SNAP assistance reaches only eligible families in need.” USDA-OIG Special Agent in Charge Charmeka Parker praised the collaboration with law enforcement partners, noting the importance of pursuing those who exploit taxpayer-funded programs.

SNAP, administered by the USDA’s Food and Nutrition Service, uses federal funds to help low-income households purchase food via EBT cards, similar to debit cards. The program, which served nearly 38 million people in 2025, has faced fraud challenges historically, though reforms like EBT have reduced trafficking rates from 4% in the 1990s to under 1.5% today. However, high-profile cases like this highlight ongoing vulnerabilities.

The case assigned to U.S. District Judge Jed S. Rakoff, underscores the government’s commitment to rooting out fraud in social welfare programs. “These charges should be a reminder that those who exploit anti-poverty programs for personal gain will be held accountable,” Carbone added.

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