A federal employee and five other individuals have been charged in connection with what officials are calling one of the largest food stamp fraud schemes in U.S. history, involving over $66 million in unauthorized Supplemental Nutrition Assistance Program (SNAP) transactions.
According to a press release from the Department of Justice, the operation was a “sprawling fraud and bribery scheme” that exploited weaknesses in the federal SNAP program and targeted taxpayer-funded nutrition benefits intended for low-income Americans.
“This is one of the largest food stamp frauds in U.S. history,” the release stated.
The defendants include Arlasa Davis, a USDA employee, along with Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, and Emad Alrawashdeh—all residents of New York state. Each faces charges related to conspiracy to steal government funds and misappropriate USDA benefits. Davis faces additional charges, including theft of government funds, bribery, and honest services wire fraud. If convicted on all counts, Davis could face up to 75 years in prison.
According to U.S. Attorney Perry Carbone, Davis played a central role by betraying her position at the USDA and enabling criminal actors to bypass government safeguards.
“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 said. “Their actions undermined a program that vulnerable New Yorkers depend on for basic nutrition.”
How the Scheme Worked
At the center of the fraud were about 160 unauthorized Electronic Benefits Transfer (EBT) terminals, which are used by retailers to process SNAP transactions. According to the indictment, retail stores that were not on the official USDA-approved list were granted access to the system through a network of insider corruption and bribery.
“Some of the defendants personally owned or controlled some of the retail stores for which they facilitated the provision of the EBT terminals,” the indictment reads. “As a result, those defendants received a portion of the unauthorized SNAP benefits those stores redeemed.”
In cases where the stores were not controlled by the defendants, prosecutors allege that the accused extracted commissions, cash payments, and other fees from the store owners in exchange for access to the illegal EBT terminals.
The fraudulent access required Food and Nutrition Service (FNS) numbers, which are essential for a retailer to legally participate in SNAP. That’s where Davis, with her privileged access to USDA databases, played a critical role.
“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 states.
Those numbers were then sold by an intermediary known as the FNS Broker to unauthorized stores and operators. Davis’s involvement is linked to more than $36 million in fraudulent SNAP redemptions, according to the DOJ.
The scheme is believed to have begun in 2019, primarily operating in the New York City area, and rapidly expanded due to internal corruption.
Trump Administration Response: “Tip of the Spear”
Agriculture Secretary Brooke Rollins praised the efforts of investigators and pledged that the Trump administration is cracking down on waste, fraud, and abuse across all levels of government.
“At 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,” Rollins said in an interview with Fox Business.
“This is not the ‘one and only,’” she continued. “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.”
Rollins emphasized the administration’s aggressive posture under President Trump’s leadership, saying the crackdown is far from over.
“It’s just the tip of the spear,” she added. “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.”
Next Steps
The DOJ said further indictments could follow, and the USDA is reviewing internal controls to prevent similar abuses in the future. The case is part of a broader federal effort to restore public confidence in entitlement programs that have long been plagued by abuse and mismanagement.
As of now, all six defendants are presumed innocent until proven guilty. If convicted, they face decades in prison and steep financial penalties.