A sprawling criminal enterprise is exploiting New York City’s convenience stores and bodegas as fronts for electronic benefits theft, law enforcement officials said. Criminals install hidden skimming devices on checkout terminals to capture Electronic Benefits Transfer (EBT) card data while using pinhole cameras and keypad overlays to steal personal identification numbers, according to the FBI. The stolen information fuels a counterfeit card operation that drains Supplemental Nutrition Assistance Program (SNAP) benefits at a cost exceeding $1 billion annually to consumers and financial institutions.
Haywood Talcove, CEO of LexisNexis Risk Solutions Government, described the scheme as a “perfect scam” after accompanying the Secret Service during a June fraud operation in New York City. Talcove observed expired inventory—including canned tuna three years past its expiration date and two-year-old pancake syrup—inside stores he believes operate primarily to facilitate card trafficking rather than legitimate grocery sales. He noted that multiple stores on single blocks sell identical merchandise, suggesting their economic viability depends on fraudulent activity rather than genuine consumer purchases.
The Secret Service’s New York Field Office conducted a three-day operation across Brooklyn, the Bronx and Queens in June, uncovering 35 illegal skimming devices and preventing approximately $36.5 million in fraudulent transactions. The operation marked the agency’s fourth anti-skimming initiative in New York City this year. Michael Peck, assistant special agent in charge of the U.S. Secret Service’s Criminal Investigative Division, revealed that organized crime groups have packed as much as $1.2 million in stolen cash into dishwashers for overseas shipment, while device installers earn roughly $150 per operation.
According to the Secret Service, many organized crime groups orchestrating EBT skimming schemes originate in Eastern Europe and finance lavish lifestyles including $10,000-monthly apartments and luxury vehicle rentals. The fraud extends far beyond traditional bodegas, with Talcove identifying a laundromat and West Coast strip club operating under false retail pretenses to accept EBT payments. The SNAP program’s lack of itemized purchase record requirements makes detection of suspicious transactions significantly more difficult.
Talcove identified fundamental vulnerabilities enabling the scheme: weak identity verification processes, outdated card technology, and insufficient transaction monitoring. He argued that vulnerable families relying on SNAP assistance become the true victims when intended food benefits are diverted to criminal enterprises. More than 250,000 retailers nationwide are authorized to accept SNAP benefits, according to the U.S. Department of Agriculture.
New York Gov. Kathy Hochul announced the state will deploy chip-enabled EBT cards beginning in early 2027 as part of a broader fraud-prevention initiative. Talcove recommended additional safeguards including the removal of suspicious retailers from the SNAP program, upgraded card technology, strengthened identity verification, and enhanced monitoring of large purchases. A New York City Department of Social Services spokesperson characterized EBT skimming as a “nationwide crisis” and pledged continued coordination with state and federal law enforcement agencies.
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