Millions commit food stamp fraud every year

BALTIMORE (WMAR) - Food stamps represent one of the fastest growing federal programs in the U.S., 46 million Americans now receive assistance, but, it's a program ripe for abuse.

Although the feds bust hundreds of retailers each year for food stamp fraud, some disqualified store owners still accept food stamps.

Cases of beer, cartons of cigarettes, even cold hard cash to buy big-ticket times, is how hundreds of your tax dollars are spent each year in a slick food stamp scheme.

"Sometimes it's the good themselves that are contraband," says Michael Tanner with the CATO Institute. "Sometimes you get cash back."

Tanner studies the governments' food stamp program for the CATO Institute, a Washington think tank. Tanner says it's easy to use food stamps illegally and the federal government knows it.

Each year, the government bas about 1,000 retailers nationwide for fraud. In the Baltimore area alone, agents have permanently disqualified 39 store owners since 2006.

"The food stamp program has always had one of the highest rates of waste, fraud and abuse," said Tanner.

An ABC 2 News investigation has revealed that some of the same vendors who were busted are wrongly readmitted to the program as many as four times. We found nearly a third of the disbarred sites were approved to trade in food stamps again.

We confronted Ijaz Hussein, who owns a food mart in Remington. A co-owner of the store was busted last year and banned from the program. Less than one year later, our partners at the Scripps Howard News Service confirmed the store was accepting food stamps and alerted the U.S. Department of Agriculture.

"That store has been notified and that store is going to be taken out of the program," said Kevin Concannon with the Department of Agriculture.

Concannon, heads the USDA's food stamp program, and says the agency has cracked down considerable on fraud in recent years.

When we returned to the food mart last month, store employees said they no longer accept food stamps.

"Back in the era of paper coupons, the fraud of trafficking rate ran in the 4% range. Since we've gone to the electronic cards, it runs more in the 1% range," said Concannon.

The Electronic Benefit Transfer Cards (EBT) are replenished monthly with taxpayer dollars and are supposed to track purchases so recipients can't buy banned items.

With help from store employees, customers can easily game the system. A clerk would ring up a case of beer as a box of cereal or charge $50 on the card and give the customer $25 in return.

The exchange rate favors the store and could bring in a whopping $50,000 extra per month, according to a 2009 federal indictment involving food stamp fraud.

If caught, store owners are forever barred from participating in the program, but we cross-referenced public documents to find that merchants skirted the ban by using various aliases.

Analysts say it can be easier for the government to let the scams continue.

Tanner says that "In many cases it's more cost, effort, political pain and potential blow back in the community than it is worth to solve the problem."

As a result of our investigation, Congressman Darrell Issa, Chairman of the House Committee on Oversight and Government Reform, says he will direct congress to crack down on the issue.

"Thanks for uncovering this," said Congressman Issa. "This makes a difference when we have watchdogs who have done their homework and allow us to do the rest of the job for you."

Congressman Issa says he will hold hearings next week on the alleged abuses. He also sent a letter asking USDA officials to explain how they will prevent banned food stamp merchants from reentering the program.

Print this article Back to Top

Comments

More Investigations

Former Oriole sued by woman who claims he sexually assaulted her Former Oriole sued by woman who claims he sexually assaulted her

A multi-million dollar civil lawsuit has been filed against a former Baltimore Oriole by a woman who claims she was sexually assaulted.

City leaders: Baltimore needs more officers to work security at events without breaking the bank City leaders: Baltimore needs more officers to work security at events without breaking the bank

For every Ravens touchdown and every Orioles inning, there are men and women in blue there to pay witness.  They're not watching the game.  They're watching you.  And no matter who wins, we found the money spent comes at a loss to the department.

Baltimore fighting back against illegal dumpers; harsher penalties to come this fall Baltimore fighting back against illegal dumpers; harsher penalties to come this fall

It's an eyesore, it's unsanitary, and it's a huge problem in Baltimore. The city spends about $17 million cleaning up illegal dumps each year, but the current penalties aren't deterring some people.

Baltimore officer gets 45 days in jail for assault of suspect in break-in of girlfriend Baltimore officer gets 45 days in jail for assault of suspect in break-in of girlfriend's home

A Baltimore City police officer was sentenced to 45 days in jail followed by 18 months of probation and 200 hours of community service for assaulting a man in police custody and then hindering the internal affairs investigation into the incident.

Daycare provider to get new trial after conviction in death of Eastern Shore baby Daycare provider to get new trial after conviction in death of Eastern Shore baby

An Eastern Shore woman convicted in the death of a child in her care will get a new trial thanks to a judge's decision.

Feds say search warrants turned up new evidence in Shawna Gunter case Feds say search warrants turned up new evidence in Shawna Gunter case

In a detention hearing in federal court, prosecutors detailed new evidence in their case against a Severna Park woman accused of posing as a physician's assistant.

Feds: Shawna Gunter, who posed as a physician Feds: Shawna Gunter, who posed as a physician's assistant and treated about 200 patients, indicted

An Anne Arundel County woman is indicted by the feds for posing as a physician's assistant and treating patients.

Many pot tests, but no certainty how much is too much Many pot tests, but no certainty how much is too much

Zero tolerance for pot has been the norm for decades for workplace drug testing, and, in most states, for policing drugged driving. But with millions of Americans now legally able to use pot for either medical purposes or outright, there’s growing demand to know how much is too much to safely drive or perform on the job.

 

 

 

Law enforcement agencies working to find balance in Law enforcement agencies working to find balance in 'thin blue line'

Across the region, police agencies say they don’t tolerate harassment among officers, though there’s no cut and dried solution.

GAO report, victim advocates raise concerns over underreporting of cruise ship crime GAO report, victim advocates raise concerns over underreporting of cruise ship crime

When it comes to cruising, people put a lot of time and energy into researching the prices, amenities and destinations. But according to a recent government report, consumers may not be as informed as they should be about the safety and security on these vessels.