Cash, Check or Food Stamps

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‘Operation Meal Ticket” includes a 21 oz. beverage, French fries, and a gender-neutral toy. Oh, and 53 individuals facing fraud and/or drug charges related to misuse of Electronic Benefit Transfer (EBTs) cards. Okay, that’s a little of a play on words, but today’s Fraud of the Day from The Tampa Tribune is a bit of a shocker.

The article reports that what began as an unrelated search that uncovered 10 food stamp cards with 10 different names, turned into a four month investigation in which undercover detectives posing as homeless people sold fake EBT cards in an effort to find out where the government-supplied funds were going.

Allegedly 24 of the buyers were people offering drugs such as cocaine, marijuana, or oxycodone in exchange for the cards. Similarly, authorities say that 21 of the individuals were storeowners who used the cards to buy items at wholesale prices in order to stock their own shelves to turn a bigger profit. As morally conscientious as these individuals surely are, a police sergeant involved in the case stated that finding buyers was hardly a problem. (They set up lines and told the alleged fraudsters to take a number.) According to the police sergeant: “You’re only supposed to buy food with it [the EBT cards], but that depends on the stores. As we found, stores are not that stringent with the cards.”

One of the biggest problems with the EBT cards is that they do not require photo-identification. Storeowners simply need cardholders to enter a PIN number, which can be changed over the phone. The cards were put in place by the Supplemental Nutrition Assistance Program (SNAP) in 2004 to replace the then-used coupons—hilariously enough—to help eradicate fraud.

Food stamp fraud is nothing new, and people who are getting away with it could easily be stopped. At the moment, presenting an EBT card without photo identification is like playing a game of ”guess the recipient” between the prospective fraudster and the cashier. Identity verification could help stop food stamp fraudsters from getting away with McMurder.

Source: Today’s ”Fraud of the Day” is based on an article entitled ”Manatee Food Stamp Sting Nabs 53 on Drug, Fraud Charges” published by The Tampa Tribune on May 9, 2012.

BRADENTON — While executing an unrelated search warrant, a Manatee County undercover sheriff’s detective recovered about 10 “food stamp” cards, each with a different name.

“It was obvious they were either stolen or sold,” Sheriff Brad Steube said, “so the undercover started asking questions of the people in the underworld. How do people come about getting these things?

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.