Inside New York’s $7 Million Food Stamp Scam: Fraudsters Allegedly Used Fake Delis to Drain Families’ Grocery Benefits

Thousands of low-income New Yorkers allegedly had their food assistance benefits stolen in an elaborate fraud operation that prosecutors say siphoned more than $7 million from government programs and used the proceeds to purchase luxury vehicles.

Eight people have been indicted in connection with what investigators described as a sophisticated fraud network operating between April 2023 and September 2025.

According to the Manhattan District Attorney’s Office, the alleged scheme targeted recipients of the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. The victims depended on the monthly payments to afford groceries and other essential items.

But when some families went to buy food on the very day their benefits were deposited, they discovered their accounts had already been emptied.

How the alleged fraud operation worked

Investigators say the group used card-skimming devices to steal EBT card numbers and personal identification numbers (PINs) from unsuspecting customers.

The stolen information was then allegedly used to produce cloned cards that could access the victims’ benefits.

The defendants allegedly established merchant processing accounts and obtained payment terminals under the names of legitimate or fictitious delis, bodegas and grocery stores.

Once the state deposited monthly benefits into the targeted accounts, the suspects allegedly used the cloned cards to repeatedly process transactions through their own payment machines.

The money was then transferred into bank accounts controlled by members of the alleged conspiracy.

Prosecutors say the group carefully monitored benefit payment schedules so they could drain accounts as soon as the funds became available.

Inside the alleged ‘fraud factory’

Photographs obtained during the investigation reportedly revealed a network of payment terminals, transaction receipts and cloned EBT cards stored in hotel rooms and the back room of a deli in Yonkers.

Investigators described the locations as a kind of fraud factory, where the equipment was allegedly used to process large numbers of fraudulent transactions.

Prosecutors identified 34-year-old Belal Hauter as the alleged ringleader. He is accused of directing other members to establish merchant processing and bank accounts used to carry out the scheme.

Other defendants named in the case include Gregory Fabiani, 46, and Abdulla Aezah, 35, who allegedly provided technical assistance and helped manage the payment systems.

Milton Rios, 53, and Yvette Rivera, 58, are also accused of opening additional merchant and bank accounts to facilitate the operation.

Luxury vehicles and money sent overseas

Authorities allege that the stolen benefits were not simply withdrawn as cash. Some of the proceeds were reportedly used to purchase luxury vehicles, while tens of thousands of dollars were transferred internationally, including to Yemen.

The Manhattan District Attorney’s Office said the operation caused serious harm to people who relied on food assistance to feed themselves and their families.

Many victims reportedly discovered their accounts had been emptied before they had an opportunity to spend their monthly benefits. Some have not been reimbursed for the money stolen.

Eight people face criminal charges

The eight defendants face charges including conspiracy, grand larceny and identity theft.

Several defendants were arraigned in New York on October 30, 2026, and pleaded not guilty. The court set bail for those defendants, and their next appearance was scheduled for December 10.

Manhattan District Attorney Alvin Bragg said the alleged conspiracy had exploited a critical public assistance program and deprived vulnerable residents of money intended for basic necessities.

The investigation highlights the growing threat of EBT card skimming, which can allow criminals to steal account information even when the legitimate cardholder still has their physical card.

New York City officials advise SNAP recipients to inspect payment terminals for suspicious attachments, monitor their account activity and never disclose their PINs to callers or people claiming to represent government agencies.

For thousands of families, the alleged scheme meant discovering that the money they depended on for groceries had vanished before they could even reach the checkout.

Source:  DAILYMAIL