Food Stamps Traded for Drugs and Cash, Welcome Crackdown Coming
EBT cards, modern-day food stamps, are being traded for cash and drugs on the street these days. Recently, more than 100 suspects from seven Florida cities, including Miami, were arrested for street transactions with a undercover agent posing as a homeless person, the Bradenton Herald reports. The agent offered an EBT card with a $300 balance in exchange for cash or drugs. Grocers and convenience store owners offered him $150 in cash. Other suspects offered the agent marijuana, cocaine, and oxycodone.
The food stamp program was first enacted in 1939 to help families suffering through the Great Depression. It may have been a bit late in coming, but at least an effort was made. The program we know today was initiated as a pilot program and 1961 and was made permanent in 1964.
Due to the lack of technology at the time, we really have no idea as to when food stamp fraud began, but we know now that it is perpetrated to the tune of hundreds of millions of dollars annually.
Technology makes it easier to track down food stamp fraud, but it seems to also be making food stamp fraud easier to execute.
Modern day defrauders have taken to Craigslist and eBay to sell their food stamp cards, or EBT cards, for cash. Food stamp recipients are selling their benefit cards and then requesting replacement cards from the government.
The Department of Agriculture is proposing new regulations for states to demand explanations from recipients who request more than three replacement cards per year.
Three lost cards per year is a bit much, not taking into account those with developmental problems, but the Fed is a behemoth that moves slowly. The proposed penalty for those who do not comply with providing an explanation for excessive replacement card requests? No more cards.
Most food stamp fraud is committed by mom and pop retailers through convenience stores and small markets. Such establishments charge a recipient's EBT card and then give them a small cash return, sometimes fifty cents on the dollar.
Recently, Khaffak Ansari, owner of a small grocery store in Minnesota, was found guilty of defrauding the food stamp program in such a fashion. Authorities claim that the grocer billed $3.1 million in EBT transactions between 2004 and 2009.
Food stamp fraud costs taxpayers approximately $750 million per year. While that may sound like an inordinate amount, it comes out to one percent of the $75 billion program. Not too bad, considering.
South Dakota, Oklahoma, Washington, D.C., Minnesota, and Washington are the states with the highest amount of requests for replacement cards. The states with the least requests are Wyoming, Idaho, New Hampshire, North Carolina, and Alabama.
The Fed has advised Craigslist and eBay about the illegal activity and both companies have stated that they would take any such listings down immediately.
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