The U.S. Attorney’s Office for the Southern District of New York announced on Thursday that a longtime USDA employee and five others were busted in one of the largest food stamp frauds in U.S. history.
A short time ago, Perry Carbone, Attorney for the United States, Charmeka Parker, the Special Agent in Charge of the U.S. Department of Agriculture, Office of Inspector General and Christopher G. Raia, the Assistant Director in Charge of the New York Field Office of the FBI revealed a superseding indictment was unsealed charging six people in connection with a $66 million-plus fraud and bribery scheme under the Supplemental Nutrition Assistance Program (SNAP) aka food stamp program.
Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, Emad Alrawashdeh, and Arlasa Davis have been hit with multiple charges, including conspiracy to steal government funds and to misappropriate USDA benefits. Davis, a USDA employee who worked as a program specialist, was employed in the division of the agency responsible for identifying SNAP fraud.
As the U.S. Attorney’s Office for the Southern District of New York explains/a>, Kehoe started a network in 2019 that handed over roughly 160 illegal EBT terminals to stores across the New York area to steal more than $30 million in EBT transactions. With the help of his co-conspirators, Nawafleh, Omar Alrawashdeh, Obaid, and Emad Alrawashdeh, Kehoe submitted approximately 200 fraudulent USDA applications, misappropriated USDA license numbers, and even forged application documents to acquire EBT terminals for unauthorized stores.
The stores included smoke shops and other businesses not eligible for USDA funds.
Davis was critical to the scheme. The Southern District of New York Attorney’s office notes that she took advantage of her position to sell 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 explained. “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.”
All told, Davis’s actions allowed over $36 million in fraudulent SNAP redemptions at unauthorized stores. Davis also photographed handwritten lists of license numbers intended for qualifying stores with her personal cell phone.
She then sent these numbers to an intermediary who proceeded to sell them to the other co-conspirators.
“Their actions undermined a program that vulnerable New Yorkers depend on for basic nutrition,” Carbone added. “These charges should be a reminder that those who exploit anti-poverty programs for personal gain will be held accountable for their crimes.”
The six culprits have each charged with one count of conspiracy to steal government funds and misappropriate USDA benefits, which can result in a maximum five year prison snetence prison, one count of theft of government funds, which could mean 10 years behind bars, and one count of misappropriation of USDA benefits, which carries a potential 20 year prison sentence.
The 56-year-old Davis has also been charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, one count of bribery, which carries a maximum sentence of 15 years in prison, and one count of conspiracy to commit honest services wire fraud, which carries a maximum sentence of 20 years in prison. If she were convicted on all charges, she could face a lifetime behind bars.