EBT fraud and abuse: Looking past your state

Posted By Todd Shepherd On July 24, 2012 @ 6:24 am

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 [2] 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 [3].”

Arizona: A 15-month investigation found roughly $700-K in EBT fraud. 18 indictments [4].

California: $69 million in EBT funds [5] withdrawn outside the state’s borders in recent years, including almost $12 million withdrawn in Las Vegas.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 [6]. Denver Post editorializes [7] 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 [8] by government bureaucrats.

Florida: Investigators find that sales of EBT cards at less than full value results in a $2-million [9] swindle.

Georgia: Man pleads guilty to EBT card scam valued at $4.6 million, believed to be largest food stamp fraud [10] ever in the state.

Illinois: Sting on “LINK” cards believed to have generated $40,000 monthly revenue [11] for one of the families accused of participating in the alleged fraud ring.

Indiana: State worker accused of issuing EBT cards to fake recipients [12]. Also, police arrest five in EBT scam [13] believed to have netted $100-K.

Iowa: Grocer, a former City Council member, convicted of witness tampering [14] during food stamp investigation and trial. In a separate story, Iowa inmates found to have been illegally receiving food stamp benefits [15] while incarcerated.

Kansas: Authorities believe as many as 7,000 fraudulent users of EBT cards are costing the state $22-million [16].

Louisiana: Eight arrested in food stamp fraud. In late 2011, the state said it had 474 active investigations [17] into possible EBT fraud/abuse.

Maine: “Tip of the iceberg [18]” investigation nets five indictments.

Maryland: Believed to be No. 2 in the nation [19] in EBT card fraud, with one in four card applications “showing evidence of fraud.”

Massachusetts: Stores accused of buying EBT cards [20] at discounted prices, and hooking up EBT card users with crack cocaine dealers.

Missouri: Welfare cards being spent [21] in such distant places as Florida and Hawaii.

New Hampshire: Report says 10 percent of all registered food stamp recipients live out of state [22].

Ohio: Audit finds 33,000 replacement EBT cards [23] 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 [24] for errors in issuing food stamps.

Washington [25]: 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 [26] that scammed $300-K or more.

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URL to article: http://watchdog.org/43198/ebt-fraud-and-abuse-looking-past-your-state/

URLs in this post:

[1] Image: http://watchdog.org/files/2012/07/BenefitsCard.jpg

[2] signing a law: http://www.pressherald.com/news/New-welfare-restrictions-target-booze-tattoos.html

[3] Food Stamp Fridays: http://www.inquisitr.com/213932/food-stamp-fridays-at-alabama-club-angers-people/

[4] 18 indictments: http://www.azcentral.com/news/articles/2011/07/14/20110714arizona-food-stamp-fraud-arrests.html

[5] $69 million in EBT funds: http://sunspot.mercedsunstar.com/?q=node/3222

[6] strip clubs, casinos: http://www.9news.com/rss/story.aspx?storyid=252242

[7] editorializes: http://www.denverpost.com/opinion/ci_20065130

[8] investigation finds massive insider fraud: http://www.courant.com/news/politics/hc-dsnap-27-fired-0313-20120312,0,6034839.story?track=rss

[9] $2-million: http://www.wesh.com/Police-3-Daytona-Beach-Stores-Busted-For-EBT-Fraud/-/11788876/13120914/-/2pjlqg/-/index.html

[10] largest food stamp fraud: http://www.macon.com/2011/10/26/1759475/man-pleads-guilty-in-food-stamp.html#ixzz1btFxfu4l

[11] $40,000 monthly revenue: http://www.cookcountysheriff.org/press_page/press_LinkCardFraud_05_12_11.html

[12] fake recipients: http://www.atmmarketplace.com/article/136684/Indiana-state-worker-charged-with-EBT-fraud

[13] EBT scam: http://www.wthr.com/global/story.asp?s=12617072

[14] witness tampering: http://thegazette.com/2010/05/07/iowa-grocer-sentenced-for-food-stamp-fraud/

[15] illegally receiving food stamp benefits: http://globegazette.com/news/local/article_5351501d-f36f-528c-960f-4228ae021d44.html

[16] costing the state $22-million: http://www.kansas.com/2011/11/30/2122572/usda-audit-identifies-kansas-food.html

[17] 474 active investigations: http://www.kentucky.com/2011/05/16/1742661/three-charged-with-food-stamp.html

[18] Tip of the iceberg: http://www.sunjournal.com/news/city/2012/01/06/more-charges-come-lewiston-welfare-fraud-investiga/1136766

[19] No. 2 in the nation: http://www.wbaltv.com/Md-Ranks-2nd-In-U-S-For-Food-Stamp-Fraud/-/9380084/8902690/-/pm9ugdz/-/index.html

[20] accused of buying EBT cards: http://boston.cbslocal.com/2011/12/13/ebt-card-scam-shut-down-in-lynn/

[21] Welfare cards being spent: http://www.kmov.com/news/local/Missouri-Welfare-Benefits-Being-Spent-in-Hawaii-117256028.html

[22] live out of state: http://www.wmur.com/Report-Significant-Food-Stamp-Medicaid-Fraud-Possible/-/9858568/11834350/-/2icw2b/-/index.html

[23] replacement EBT cards: http://www.wcpo.com/dpp/news/local_news/investigations/i-team-food-stamp-fraud-continues-despite-electronic-tracking

[24] $4 million in federal fines: http://www.kcbd.com/story/12744209/texas-fined-for-food-stamp-fraud-happening-in-lubbock

[25] Washington: http://www.king5.com/news/investigators/Seattle-business-owner-admits-to-million--food-stamp-fraud-118935499.html

[26] multi-year fraud: http://www.jsonline.com/news/milwaukee/119794529.html

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