Everything You Need to Know About Food Stamp Fraud
Simply put, welfare fraud is the intentional misuse of welfare systems by withholding information or providing false and inaccurate information.
The U.S. Department of Labor reports that 2% of food stamp payments are due to fraud or abuse within the Supplemental Nutrition Assistance Program (SNAP) program. In 2010, the LA Times reported that 25% of new welfare applications in San Diego County contain some fraud.
Examples of food stamp fraud in America include:
A 1977 case where a Chicago woman named Linda Taylor relied on over 14 aliases to obtain over $150,000 for food stamps and other welfare benefits. She is thought to be the basis of term "welfare queen" coined by President Regan.
Dorothy Woods claimed 38 children. The children were non-existent but the eight years she got in jail were very real.
Esther Johnson received four years in a California state prison for collecting almost a quarter-million dollars to feed 60 fictitious children.
Arlene Otis was indicted in Cook County, Illinois on over 600 charges of fraudulently receiving over $150,000 in welfare and food stamp funding between 1972 and 1978. Arlene spent four years in jail for her scam.
Multiple Arrests Highlight Store Owners
Individuals defrauding SNAP aren't the only ones who have been caught up in tightened enforcement.
In June 2015, law enforcement in Birmingham raided 11 stores as part of the government's continuing investigation into EBT fraud.
Several agencies in Birmingham arrested 17 individuals on charges that included public assistance scam, theft of goods and deceitful use of a credit card.
Corner store owners would buy EBT cards from food stamp recipients often paying just 50 cents on the dollar. A card loaded with $150 in benefits would be sold to a corrupt store owner for $75.
The store owner would then purchase food from wholesalers to sell in their stores at significantly marked-up prices.
The store owners, existing in the middle of a food desert, would charge more than what mainstream markets would charge. With no transportation available, SNAP recipients were caught in the downward spiral of fraud. It is not just EBT recipients being ripped off but the working poor as well.
According to Birmingham District Attorney, Cynthia Raulston, those selling the cards are often driven by their desire to buy drugs or alcohol — two things that can't be bought through SNAP.
Alabama authorities also claim that some of the profits from the cash-for-card scheme is being wired to Yemen and other places in the Middle East.
The fraud ring came to light when a shoplifter was arrested for attempting to steal steaks from a WalMart. He was taking the things to be marketed in two corner stores. The thief told police that stores were involved, and further investigation uncovered the EBT fraud.
Food stamp fraud "is enormous and pervasive," Raulston told reporters. "We had to cut off the number of prosecutions this time round. This will be an ongoing investigation."
In February 2015, it looked like the Republican-controlled Congress was on the verge of tackling a couple of issues that would block food stamp exploitation. Led by Rep. Matt Salmon, a Republican from Arizona, the nine Republicans worked to shut down food stamp fraud.
The food stamp program — known as the Supplemental Nutritional Assistance Program, or SNAP — is the federally funded program where funds are loaded onto "electronic benefits transfer" (EBT) cards for recipients.
So far, so good.
The problem? Recipients often turn around and sell the cards on the street for cash.
The legislators drafted legislation that would require SNAP users to present a photo ID whenever they purchased food with an EBT card.
According to one report, fraudulent use of the EBT cards cost taxpayers over $850 million annually. Even on a national level that's a significant amount of money which could have been used for other programs such as taking care of veterans.
The food stamp program has been abused, and many states are thinking it's now time for a major overhaul.
In response to the SNAP fraud, a dozen states have either introduced legislation to perform drug testing on welfare recipients to make sure that public funds are not being used to support illegal activities.
Other states, like Florida and Arizona, have created requirements that eligible recipients must work a certain minimum number of hours to receive benefits.
Democrats in Arizona pushed back against the requirements contained in Salmon's bill. The legislation's opponents claim that most welfare recipients don't have access to obtaining photo ID cards.
The real issue appears to come down to votes. If voters are required to get an ID for things like welfare, opponents wonder how long it will be before an ID is required for voting.
About the writer: Arkady Bukh, Esq is a nationally recognized attorney, published author, and frequent media contributor.
Comments