Welfare Fraud and Abuse: A State by State Sampling

July 26, 2012
By

Fraud is skyrocketing as states move from paper-based food stamps to plastic, electronic benefits transfer cards preloaded with a monthly stipend of cash

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California: $69 million in EBT funds withdrawn outside the state’s borders in recent years, including almost $12 million withdrawn in Las Vegas.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 $100,000.

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 $300,000 or more.

This article appears courtesy of watchdog.org

Comments made by visitors are not representative of The Colorado Observer staff.

One Response to Welfare Fraud and Abuse: A State by State Sampling

  1. Obrien Jamas
    January 6, 2013 at 9:27 pm

    Please follow this link, register on the white house petition site and sign the below petition requesting more action on welfare abuse:

    https://petitions.whitehouse.gov/petition/please-take-some-significant-action-reduce-enormous-amount-fraud-government-handout-programs/BrZfBzdX

    The petition will not be viewable to the public on the site until we reach the minimum number of signatures.

    Text of petition:

    WE PETITION THE OBAMA ADMINISTRATION TO:

    Please take some significant action to reduce the enormous amount of fraud in government handout programs.
    While people sometimes need help, direct government assistance & govt subsidized assistance is obviously loaded with fraud. Something needs to be done to let working taxpayers know that their dollars are helping those who need help, not enabling the many fraudsters who are gaming the system as they collect from multiple sources… private sector help; govt subsidized help & various government programs. Those of us who work & continue to see our costs go up (often in the form of hidden taxes or fees at various levels of govt) are getting tired of hearing about people with free govt cell phones who also have unlimited smart phones, people relying only on aid living in better housing than working people & owning luxury items. No wonder there are so many secession petitions.

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