Food Stamp Fraud
More Americans than ever have become recipients of food stamps. At last count the United States was over 46,000,000 recipients, an astounding 1 out of every 7 Americans. The total cost in fiscal 2011 was $75.3 billion from the Supplemental Nutrition Assistance Program, according to Agriculture Department statistics released Monday.
With more recipients comes the greater chance of food stamp fraud. The Agriculture Department plans to announce new steps to crack down on SNAP fraud amid estimates suggesting as much as $753 million in federal food aid is spent fraudulently each year.
Officials said smaller retailers often fraudulently obtain PIN or card numbers from program beneficiaries and keep the funds without the person’s knowledge. In the last decade, USDA has disqualified more than 8,300 retailers for such fraud.
In other cases, some beneficiaries receive monthly deposits of food aid on credit cards similar to bank cards. They intentionally use SNAP benefits to purchase water or other beverages with bottle deposits, dump the liquid and then obtain cash for bottle deposits. Some attempt to sell SNAP benefits in exchange for cash on Craigslist and social media sites.
A South Texas grocer was sentenced to 4 years in prison and ordered to repay $2.5 million because of electronic food stamp fraud. The scam involved swapping card benefits from participants in the food stamp program for discounted amounts of cash. Prosecutors say Parviz Sheikh Rezaei would then charge the government for the full value of the Lone Star card transaction.
State investigators in Ohio have charged three employees of a West Toledo convenience store with food-stamp fraud. They were accused of allowing customers to purchase alcohol and other nonfood items with food stamps.
The Washington Examiner recently reported that Maryland and Virginia were two of the five worst states in the country for food stamp fraud. The national average is $3.05 in fraud for every $100 in benefits. Maryland was twice that at $6.11 per $100 in benefits while Virginia was $5.04 per $100 in benefits. This translates into $130 million for ineligible benefits.
Meanwhile, a federal audit in the state of Kansas found that not only were people using invalid Social Security numbers but many of the recipients were in fact dead.
Finally, in Oregon three women, including one who worked in the Oregon Department of Health and Human Services, were charged with stealing food stamp benefits by using stolen identities. They could receive up to 20 years for the most serious charge, conspiracy to commit wire fraud.