States may get more power to fight food stamp fraud

Benefit cards being illegally sold for cash




State's rank on list may not indicate fraud

Washington state ranks fifth in the nation for the highest percentage of food stamp recipients habitually seeking replacement Supplemental Nutrition Assistance Program cards. About 2.63 percent of the state’s food stamp recipients have requested four or more replacement cards a year, according to the U.S. Department of Agriculture’s Food, Nutrition and Consumer Services.

But unlike other states, replacement cards in Washington include recipients who have reapplied for benefits after going off food stamps, said Thomas Shapley, spokesman for the state Department of Social and Health Services.

“That throws a wrench in the state-by-state comparison,” Shapley said.

New proposed federal rules aimed at curbing fraud would authorize states to require a formal explanation when a recipient seeks three or more replacement cards a year.

“We serve elderly, intellectually disabled, and homeless (people) who sometimes have trouble managing their cards, so requests for multiple replacements does not automatically denote fraud,” said Regan Hopper of Food, Nutrition and Consumer Services. “The card replacement rule gives states a tool to either educate and train those who may not understand how to care for or manage their cards. Just as important, it helps states determine if there are other indications of potential fraud to investigate.”

The state formed the DSHS Office of Fraud and Accountability in March 2011 to catch and root out cases of fraud among recipients of food stamps and other public assistance benefits. Since then, the office has been involved in undercover operations to expose attempts to sell public assistance benefits for cash.

In one case, an undercover DSHS investigator from the Office of Fraud and Accountability posed as a potential buyer for a food stamp card a Marysville woman had advertised on her Facebook profile, according to a DSHS news release. The investigator met her in a public parking lot in Snohomish County to make the purchase, which was filmed by other DSHS investigators. The woman was not named in the news release, and it was not immediately available Thursday.

— Paris Achen, Columbian staff writer

WASHINGTON — Food stamp recipients are ripping off the government for millions of dollars by illegally selling their benefit cards for cash — sometimes even in the open, on eBay or Craigslist -- and then asking the government for replacement cards.

The Agriculture Department wants to curb the practice by giving states more power to investigate people who repeatedly claim to lose their benefit cards.

It proposed new rules Thursday that would allow states to demand formal explanations from people who seek replacement cards more than three times a year. Those who don't comply can be denied further cards.

"Up to this point, the state's hands have been tied unless they absolutely suspected fraudulent activity," said Kevin Concannon,

the department's undersecretary for food, nutrition and consumer services.

Overall, food stamp fraud costs taxpayers about $750 million a year, or 1 percent of the $75 billion program that makes up the bulk of the department's total budget for the Supplemental Nutrition Assistance Program.

Most fraud occurs when unscrupulous retailers allow customers to turn in their benefits cards for lesser amounts of cash. But USDA officials are also concerned about people selling or trading cards in the open market, including through websites.

Last year, the department sent letters urging eBay and Craigslist to notify customers that it's illegal to buy and sell food stamps. USDA officials followed up last month, saying they are still getting complaints that people are using the websites to illegally market food stamps.

Both eBay and Craigslist have told the government they are actively reviewing their sites for illegal activity and would take down ads offering food stamp benefits for cash. The USDA also has warned Facebook and Twitter about the practice.

South Dakota, Oklahoma, Washington, D.C., Minnesota and Washington state have the highest percentage of recipients seeking four or more replacement cards during the course of a year. But USDA officials said that doesn't necessarily indicate a high rate of fraud. All states are required by law to reissue lost or stolen cards to those who are eligible for benefits.

Wyoming, Idaho, New Hampshire, North Carolina and Alabama have the lowest percentage of households requesting four or more cards in a 12-month period.

In North Carolina, the state already issues warning letters to people who request four replacement cards in a year, letting them know that officials are monitoring them closely. Dean Simpson, chief of economic family services for the North Carolina Division of Social Services, said the new rules would give her state even more of a boost in curbing food stamp fraud.

"I think it would help with the trafficking and let individuals know they are being observed and watched," said Simpson, who oversees the state's distribution of food stamps.

More than 46 million people receive food stamps, nearly half of them children. The average monthly benefit is $132 per person.

Benefit cards work like debit cards, allowing users to swipe them for food purchases at some 231,000 stores around the country that are authorized to take part in the food stamp program