The Department of Justice (DOJ) charged six individuals, including one federal employee, in an alleged multi-million dollar food stamp fraud case.
The defendants allegedly defrauded the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, according to a press release Thursday from the DOJ. The scam, involving a USDA employee, reportedly amassed over $66 million in transactions through the use of unauthorized Electronic Benefit Transfer (EBT) terminals at retail locations and with the assistance of fraudulent codes provided by the employee to redeem SNAP uses at stores, the agency stated.
The scheme began in 2019, where approximately 160 unauthorized EBT terminals were placed in unlicensed retail locations throughout the U.S., including Manhattan, according to the DOJ’s complaint. Michael Kehoe, who allegedly oversaw the network, worked with co-conspiritors Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid and Emad Alrawashdeh, processing around $30 million in illegal transactions and submitting 200 fraudulent USDA applications with false documentation.
Arlasa Davis, who worked at the USDA, allegedly provided false EBT numbers to an intermediary who sold the information to the co-conspirators, the press release states. Davis reportedly used her personal cellphone to contact the intermediary and conduct fraud.
In addition, Davis reportedly received cash bribes disguised as “birthday gifts” or “flowers” for her role. Davis’ actions allowed the group to collect $36 million more, bringing the total scheme to $66 million, the release states.
“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,” U.S. Attorney Perry Carbone said in the statement. “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.”
The DOJ’s Office of Public Affairs did not respond for comment.
Davis, Kehoe, Nawafleh, Obaid, Emad and Omar Alrawashdeh are charged with conspiracy to steal government funds and misappropriate USDA benefits, theft of government funds, and misappropriation of USDA benefits, the DOJ said.
Davis is also charged with conspiracy to commit bribery and conspiracy to commit honest services wire fraud. Nawafleh, who fled the country while on bail, is also charged with failure to appear. He is allegedly in Jordan, according to the DOJ’s complaint.
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