Trump’s USDA just uncovered ‘one of the largest’ food stamp fraud, bribery schemes in US history — 6 arrested for alleged $66M in ‘unauthorized transactions’

What is SNAP?

SNAP — formerly known as the food stamp program — is the country’s largest federal nutrition assistance program. It provides monthly benefits to help low-income families buy groceries and reduce food insecurity, serving an average of 42.1 million people per month in 2023.

In fiscal year 2023, the federal government allocated nearly $112.8 billion to SNAP, according to the USDA’s Economic Research Service. About 94% of that went directly to households trying to keep food on the table. The remaining 6% covered state administrative costs, according to the Center on Budget and Policy Priorities.

But questions about oversight are growing. U.S. Secretary of Agriculture Brooke Rollins told Fox Business she believes that 20 to 30% of the program’s annual funding — now estimated closer to $200 billion — may be lost to fraud. The recently uncovered $66 million scheme, she says, is “just the tip of the spear.”

“It’s time for real, effective change,” Rollins said.

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An inside job

Federal officials say the scheme 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.