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| The Supplemental Nutrition Assistance Program (SNAP) provides electronic benefits through an EBT card to help low-income individuals and families purchase food and is intended to ensure access to a nutritionally adequate diet. |
The U.S. Department of Justice has charged six people — including a fraud investigator with the U.S. Department of Agriculture (USDA) — for allegedly orchestrating “one of the largest Electronic Benefits Transfer scams in U.S. history,” siphoning tens of millions from the Supplemental Nutrition Assistance Program (SNAP). The six individuals charged in the New York fraud case are Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, Emad Alrawashdeh, and Arlasa Davis.
According to the U.S. Attorney’s Office for the Southern District of New York, the group ran a fraudulent network of about 160 unauthorized electronic benefit transfer (EBT) terminals across the New York area. These machines processed more than $30 million in illegal SNAP transactions, part of a larger scheme that generated an estimated $66 million in unauthorized benefits.
Federal authorities said the case was cracked through a joint investigation between the FBI and the USDA’s Office of the Inspector General (USDA-OIG). The collaborative effort highlighted the importance of inter-agency oversight of weaknesses in federally funded programs.
“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,” said USDA-OIG Special Agent in Charge, Charmeka Parker in a press release.
Prosecutors allege that the group accepted bribes and submitted fraudulent USDA applications to obtain SNAP approval for unqualified stores. One of the defendants, USDA employee Arlasa Davis, is accused of selling confidential government information to the very criminals she was meant to stop.
Federal officials say the scheme was an inside jobe that began back in 2019, when Michael Kehoe allegedly created a network to supply unauthorized EBT terminals to small businesses across the New York area.
According to prosecutors, Kehoe and his associates falsified USDA applications, misused license numbers and altered key documents to get fraudulent retailers approved for SNAP.
Kehoe and Davis are among six people now facing charges for conspiracy to steal government funds and misappropriate USDA benefits. The others include Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid and Emad Alrawashdeh.
But this case isn’t an isolated case. A separate FOX10 investigation found that thousands of families in Alabama were recently targeted in another EBT fraud scheme.
Between September and December 2024, more than $12.4 million was stolen from EBT cardholders, according to the Alabama Department of Human Resources. More than 373,000 households in the state rely on those benefits.
Despite high-profile cases, fraud within SNAP is relatively rare. The introduction of EBT cards in the late 1990s replaced paper coupons, making benefits more secure and harder to misuse. As a result, SNAP fraud declined from about 4 cents on the dollar in 1993 to approximately 1 cent by 2006, and even lower in subsequent years.
As the investigation unfolds — and new fraud cases emerge across the U.S. — officials warn that similar scams may still be operating, adding pressure on government agencies to tighten oversight of vital aid programs.
According to the U.S. Attorney’s Office for the Southern District of New York, the group ran a fraudulent network of about 160 unauthorized electronic benefit transfer (EBT) terminals across the New York area. These machines processed more than $30 million in illegal SNAP transactions, part of a larger scheme that generated an estimated $66 million in unauthorized benefits.
Federal authorities said the case was cracked through a joint investigation between the FBI and the USDA’s Office of the Inspector General (USDA-OIG). The collaborative effort highlighted the importance of inter-agency oversight of weaknesses in federally funded programs.
“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,” said USDA-OIG Special Agent in Charge, Charmeka Parker in a press release.
Prosecutors allege that the group accepted bribes and submitted fraudulent USDA applications to obtain SNAP approval for unqualified stores. One of the defendants, USDA employee Arlasa Davis, is accused of selling confidential government information to the very criminals she was meant to stop.
Federal officials say the scheme was an inside jobe that began back in 2019, when Michael Kehoe allegedly created a network to supply unauthorized EBT terminals to small businesses across the New York area.
According to prosecutors, Kehoe and his associates falsified USDA applications, misused license numbers and altered key documents to get fraudulent retailers approved for SNAP.
Kehoe and Davis are among six people now facing charges for conspiracy to steal government funds and misappropriate USDA benefits. The others include Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid and Emad Alrawashdeh.
But this case isn’t an isolated case. A separate FOX10 investigation found that thousands of families in Alabama were recently targeted in another EBT fraud scheme.
Between September and December 2024, more than $12.4 million was stolen from EBT cardholders, according to the Alabama Department of Human Resources. More than 373,000 households in the state rely on those benefits.
Despite high-profile cases, fraud within SNAP is relatively rare. The introduction of EBT cards in the late 1990s replaced paper coupons, making benefits more secure and harder to misuse. As a result, SNAP fraud declined from about 4 cents on the dollar in 1993 to approximately 1 cent by 2006, and even lower in subsequent years.
As the investigation unfolds — and new fraud cases emerge across the U.S. — officials warn that similar scams may still be operating, adding pressure on government agencies to tighten oversight of vital aid programs.
“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,” U.S. Attorney Perry Carbone said in a press release. “Their actions undermined a program that vulnerable New Yorkers depend on for basic nutrition.”
The Law
Overview of EBT Fraud Laws
EBT (Electronic Benefit Transfer) fraud involves the misuse of benefits provided through programs like the Supplemental Nutrition Assistance Program (SNAP). Various laws govern the penalties and definitions of such fraud.
Enforcement
Overview of EBT Fraud Laws
EBT (Electronic Benefit Transfer) fraud involves the misuse of benefits provided through programs like the Supplemental Nutrition Assistance Program (SNAP). Various laws govern the penalties and definitions of such fraud.
Federal Laws
7 U.S. Code § 2024 - Food Stamp FraudThe above federal laws outline the following:
Fraudulent Activities:
It is illegal to knowingly use, transfer, acquire, alter, or possess SNAP benefits in violation of the law.
Penalties:
Types of Fraud
Felony: If the value of benefits is $5,000 or more.
Misdemeanor: If the value is between $100 and $5,000.
Suspension: Convictions can lead to suspension from SNAP for up to 18 months.
Misdemeanor: If the value is between $100 and $5,000.
Suspension: Convictions can lead to suspension from SNAP for up to 18 months.
Types of Fraud
Trafficking: Selling SNAP benefits for cash.
False Information: Providing incorrect details on applications to receive more benefits.
Unauthorized Use: Using someone else's EBT card without permission.
False Information: Providing incorrect details on applications to receive more benefits.
Unauthorized Use: Using someone else's EBT card without permission.
Investigations - States are required to investigate suspicious transactions and can impose stricter penalties on retailers involved in fraudulent activities.
To report EBT fraud in California, you can contact the Fraud Hotline at 1-800-344-8477. You can also email them at FraudHotline@dss.ca.gov for assistance. To report welfare fraud contact the appropriate County Agency directly.
How to Report SNAP EBT Fraud
To report EBT SNAP fraud, you can contact your state's Department of Human Services or the Office of Inspector General (OIG) hotline. In Georgia, for example, you can call the Georgia EBT hotline at 1-888-421-3281 or visit the OIG website to submit a complaint. To report EBT fraud nationally, you can contact the U.S. Department of Agriculture's Food and Nutrition Service at 1-800-424-9121.To report EBT fraud in California, you can contact the Fraud Hotline at 1-800-344-8477. You can also email them at FraudHotline@dss.ca.gov for assistance. To report welfare fraud contact the appropriate County Agency directly.