Bribed USDA Employee Helps Run “One of the Largest Food Stamp Frauds in U.S. History”

Long plagued by waste and corruption, the nation’s massive food stamp program has reached a new low with a multi-million-dollar fraud and bribery scheme abetted by an insider at the U.S. Department of Agriculture (USDA), the agency that administers the scandal-plagued welfare program. It gets better. The longtime USDA employee worked in a special division responsible for identifying fraud—which is rampant—within the food stamp program, which was renamed Supplemental Nutrition Assistance Program (SNAP) by the Obama administration to eliminate the stigma of receiving public assistance. Her name is Arlasa Davis and federal prosecutors recently charged her and five of her accomplices for operating “one of the largest food stamp frauds in U.S. history.”

For more than five years Davis and her conspirators ran a “sprawling fraud and bribery scheme that generated over $66 million” in unauthorized food stamp transactions, according to the Department of Justice (DOJ). The Federal Bureau of Investigation (FBI) found that Davis abused her position and privileged access to confidential government databases to help the others in the ring embezzle food stamp benefits by driving tens of millions of dollars in fraudulent transactions. Federal authorities say the disgraced federal employee sold hundreds of Electronic Benefits Transfer (EBT) numbers that enabled tens of millions of dollars in fraudulent food stamp redemptions at unauthorized stores. EBT is the electronic system that allows a food stamp participant to pay for food using the taxpayer-funded benefit. With her personal cellphone, Davis photographed handwritten lists of license numbers intended for qualifying stores and transmitted them to an intermediary who sold them to the others criminally charged in this case.

The co-defendants—Michael Kehoe, Mohamad Nawafleh, Omar Alrawashdeh, Gamal Obaid and Emad Alrawashdeh—used the license numbers to fraudulently obtain EBT terminals for stores that were not authorized by the USDA to process food stamp transactions. Davis received substantial bribes from the ring disguised in communications obtained by the feds as birthday gifts and flowers. The illicit operation began in 2019 when Kehoe created a network that supplied about 160 unauthorized EBT terminals in stores across New York, including in smoke shops and other ineligible businesses, to illegally process millions of dollars in EBT transactions, federal prosecutors say. The six defendants are charged with conspiracy to steal government funds and misappropriate USDA benefits and Davis is additionally charged with bribery and honest services fraud. They all face 10 to 20 years in prison. “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, said Perry Carbone, the U.S. Attorney for the Southern District of New York, who assures those who exploit anti-poverty programs for personal gain will be held accountable.

The case marks the latest of many scandals to rock the nation’s bloated food stamp program, which has grown immensely in the last few years, serving a record 42.1 million participants in 2023 at a cost of $112.8 billion, according to USDA figures. The number went down to $100.3 billion in 2024, and the Trump administration is working to cut it further. Food stamp fraud is so pervasive that the USDA launched a special system to facilitate the replacement of the welfare benefit when recipients claim it stolen. In the program’s first two years the government doled out a hefty $61.5 million to replace pilfered food stamps in 127,290 cases. That figure has since skyrocketed to a whopping $102,425,077 to replace 226,196 of the 691,604 benefits reported stolen, according to the latest figures published in the SNAP Replacement of Stolen Benefits Dashboard. Recipients in practically every state have submitted claims with New York leading the pack at 33,468, followed by California (32,258), Alabama (26,919) and Oklahoma (21,553).