Federal authorities have charged a U.S. Department of Agriculture employee and five others in a wide-reaching fraud and bribery scheme. Prosecutors allege the group defrauded the Supplemental Nutrition Assistance Program (SNAP) of $66 million through unauthorized transactions. The U.S. Attorney’s Office for the Southern District of New York described the operation as “one of the largest food stamp frauds in U.S. history.”
Fake EBT Terminals and Transactions
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Michael Kehoe—who has no known connection to Missouri Governor Mike Kehoe—allegedly led a New York-based network that manipulated the system to distribute around 160 electronic benefit transfer (EBT) machines to unqualified businesses. These included smoke shops and other ineligible retailers.
The scheme involved processing fake or illegal EBT transactions, resulting in over $30 million in activity that violated federal law.
Insider Involvement at the USDA
Arlasa Davis, a longtime USDA employee, is accused of playing a key role. She worked in the department responsible for identifying and preventing SNAP fraud. Prosecutors say Davis exploited her access to internal systems by photographing handwritten lists of valid EBT license numbers—intended only for approved stores—and sending them to her co-conspirators.
Those stolen credentials were allegedly used to secure EBT terminals for businesses not authorized to accept SNAP benefits, including smoke shops.
In return, Davis reportedly accepted bribes disguised as “birthday gifts” or “flowers,” according to the Department of Justice.
U.S. Attorney’s Statement
“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. “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. These charges should be a reminder that those who exploit anti-poverty programs for personal gain will be held accountable for their crimes.”
Charges and Penalties
The six individuals charged—Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid, Emad Alrawashdeh, and Arlasa Davis—each face:
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One count of conspiracy to steal government funds and misuse USDA benefits
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One count of theft of government funds
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One count of misappropriation of USDA benefits
Each of these charges carries a maximum penalty of 35 years in prison.
In addition, Arlasa Davis faces:
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One count of conspiracy to commit bribery
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One count of bribery
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One count of conspiracy to commit honest services wire fraud
These charges could result in up to 40 additional years behind bars.
Mohamad Nawafleh also faces one count of failure to appear, which carries up to 10 years in prison.
