EBT fraud and abuse: Looking past your state

By   /   July 24, 2012  /   12 Comments

By Todd Shepherd  | Watchdog.org

Fraud is skyrocketing as states shift from issuing paper-based food stamps to plastic, electronic benefits transfer cards preloaded with a monthly limit of cash intended only for food purchases.

Fraud is skyrocketing as states shift from issuing paper-based food stamps to plastic, electronic benefits transfer cards preloaded with a monthly limit of cash intended only for food purchases.

Examples of fraud prompted Congress to take action, with President Obama signing a law in February intended to prevent EBT cardholders from spending their money on tattoos and at strip clubs, liquor stores and casinos.

Here’s a state-by-state listing of some EBT fraud stories:

Alabama: Not fraudulent, but are EBT cards becoming a status symbol? In Alabama, a place called the “Rose Supper Club” gives you $5 off the cover price if you show your EBT card. It’s a promotion called “Food Stamp Fridays.”

Arizona: A 15-month investigation found roughly $700-K in EBT fraud. 18 indictments.

California: $69 million in EBT funds withdrawn outside the state’s borders in recent years, including almost $12 million withdrawn in Las Vegas.

Colorado: EBT cards used at strip clubs, casinos. Denver Post editorializes that attempts to crack down on fraud might not be worth it.

Connecticut: 27 state workers fired, 10 others retire after investigation finds massive insider fraud by government bureaucrats.

Florida: Investigators find that sales of EBT cards at less than full value results in a $2-million swindle.

Georgia: Man pleads guilty to EBT card scam valued at $4.6 million, believed to be largest food stamp fraud ever in the state.

Illinois: Sting on “LINK” cards believed to have generated $40,000 monthly revenue for one of the families accused of participating in the alleged fraud ring.

Indiana: State worker accused of issuing EBT cards to fake recipients. Also, police arrest five in EBT scam believed to have netted $100-K.

Iowa: Grocer, a former City Council member, convicted of witness tampering during food stamp investigation and trial. In a separate story, Iowa inmates found to have been illegally receiving food stamp benefits while incarcerated.

Kansas: Authorities believe as many as 7,000 fraudulent users of EBT cards are costing the state $22-million.

Louisiana: Eight arrested in food stamp fraud. In late 2011, the state said it had 474 active investigations into possible EBT fraud/abuse.

Maine: “Tip of the iceberg” investigation nets five indictments.

Maryland: Believed to be No. 2 in the nation in EBT card fraud, with one in four card applications “showing evidence of fraud.”

Massachusetts: Stores accused of buying EBT cards at discounted prices, and hooking up EBT card users with crack cocaine dealers.

Missouri: Welfare cards being spent in such distant places as Florida and Hawaii.

New Hampshire: Report says 10 percent of all registered food stamp recipients live out of state.

Ohio: Audit finds 33,000 replacement EBT cards ordered in one year. “[M]ore than 1,500 people in Hamilton County have ordered 10 replacement cards or more since 2006.”

Texas: State faced $4 million in federal fines for errors in issuing food stamps.

Washington: Store owner sentenced to 21 months in prison: $170,000 in her bank account on the day of the raid.

Wisconsin: Nine county workers suspected in multi-year fraud that scammed $300-K or more.

Click here to LEARN HOW TO STEAL OUR STUFF!

  • Steve D

    But don’t worry. I’m sure they’ll do a much better job managing Obamacare.

  • Ryan Johnson

    I’ve got a small editing gripe with this article. The statement ‘Fraud is skyrocketing as states shift from issuing paper-based food stamps to plastic, electronic benefits transfer cards’ seems to suggest that the change over from paper to plastic has something to do with food stamp fraud. Food stamp fraud has been with us since the inception of the programs. If we are seeing more of it now, it is most likely from the following two reasons:

    1) The great recession has caused these programs to ‘ramp up-quickly’. Fast ramp-ups cause most bureaucracies to get sloppy. The people working in them are stretched in time and resources and are more concerned with getting these programs to people who need them than making sure that everybody that asks for it are legitimately qualified people. This suggests that when returns food stamp utilization returns to a normal, The bureaucracy will start doing it’s job correctly and we should see a marked decrease in fraud.

    2) EBT has allowed states to better track the usage. The fraud has always been there, now we are just better at seeing it (computers data mining the transfers). This suggest that more enforcement is needed.

    I personally think #2 is the larger effect here.

  • Rich K

    So all those stories of fraud are just bunk then,said the liberals who believe people are starving in the streets.All these stories can not be true and Nancy P will back me up because even she needs help with her taxes just so she can feed her poor kids.Or something,,,,,

  • Citizen B

    The County Jail I work at, 90% of the Inmates that come in have EBT cards. They can afford to party, buy drugs, get tattoos, have smart phones, fast cars, but can’t buy food. YOU are buying it for them.

  • http://Jasoncoleman.com Jason Coleman

    In Alabama, if an establishment that accepts EBT payments also owns an ATM they can set it up so that Ebt cardholders can withdraw cash. Many convenience set theirs up this way so people can buy beer and cigs. Some are brazen enough to post signage instructing customers on this loophole.

  • TerriGeer

    The majority of people, that I know use EBT cards, do not misuse them. At all. These people are honest and are relieved that EBT is available to them.

    As for other people using their cards, I have used other people’s card when they are not able to leave their home to shop. They give me a shopping list, and their card, and I shop for them. There are two that I do this for.

    As for having the SNAP program, instead of paper food stamps, the EBT card is much, much better. It is, also, very difficult to steal them this way.

    I do not get cash assistance on my EBT card (I’m on SSDI and use DirectExpress) but the people that I know who do use them responsibly, too. As for taking cash out? Of course there are valid reasons. Bills that cannot be paid electronically, laundry money, etc.

  • TerriGeer

    Are you deranged? Because you sure seem to be. Blaming everything on one party or another is foolish because life doesn’t work that way. Grow up.

  • obamatheterrible

    Wouldn’t it be better to establish monthly food rations and have them come to a center once a month to get them? This would create jobs. Also why is it that welfare recipients are entitled to everything? I work and pay taxes. Why do I have to pay for food, housing, internet, cable tv? I punished for being responsible and I still don’t live with an attitude that the whole world owes me. Welfare recipients should get the most bare necessities to survive. If they don’t like it, get a job.

  • SickandTiredofit

    What about the latest EBT glitch in Louisiana? Now this calls for swift and harsh punishment for all those offenders. Check out the news story on this site…

    http://www.glennbeck.com/2013/10/14/food-stamp-glitch-sparks-massive-shopping-frenzy-in-louisiana/

    Unbelievable…or is it really?

  • Mike

    Maybe I am deranged but I have to question a program that allows a 29 year old “Surfer dude” in California to use his SNAP card to buy sushi, lobster and beer. Or that in Florida you can sell your EBT card right around the corner from the issuing office; or that in Colorado you can use your EBT card in Strip Clubs. Yes, millions of people need the assistance a EBT card gives them but when the BO administration is actively recruiting participation in the program with few on no requirements they are practically asking for abuse of the system

  • Mike

    When the BO administration is actively recruiting participation in the program with little or no requirements or oversight they are setting themselves up for fraud on a massive scale.

  • Mike

    Tell me please when the US government has ever – ever – operated a program efficiently and effectively. USPS, AMTRAK, Medicare/Medicaid and to some extent, even the US government.

x

Join other concerned citizens who get the latest updates from Watchdog.org on government waste, fraud, or abuse.


Read stories like:

Enter your email and stay on top of the news that matters.