KMIIR6 Investigates Food Stamp Fraud
Photo: Video by kmir6.com
Food stamp fraud costs taxpayers millions of dollars, and it's happening right here in the desert.
You asked us to investigate the multi-billion dollar food stamp program.
More than 46 million people in the United States use food stamp benefits to help them feed their families.
In California, the CalFresh program used about seven billion dollars in federally funded benefits in 2012.
But with big programs and dollar amounts, abuse of the system can cost you, the taxpayer.
In November at an Indio store, federal agents swarmed a business - the owner was accused of defrauding about three and a half million dollars from the United States.
"I mean the abuse of the program is sort of overwhelming, that's one little incident in Indio, multiplied by 50 states, is huge," said part-time desert resident, Arlene Wilkolaski.
The Office of the Inspector General sends in undercover agents to investigate these types of cases.
"What the store owners will do, and they know that there's that demand, and they'll just charge a fee essentially, saying you come scan your benefits, that goes into the store owner's bank account, he might deduct 100 dollars from the card, and he might give the individual 50 dollars, and so the store owner essentially makes 50 dollars," said Special Assistant United States Attorney, Stephen Merrill.
The US Department of Agriculture is in charge of "SNAP" benefits, formerly known as the food stamp program.
Each state administers the federal money.
In California, there's the CalFresh program.
This money can only be used for food items, no household supplies, no alcohol, only food.
"The program should exist, however in my opinion I think there should be harsher checks and balances to make sure that people that are receiving the benefit actually qualify for it," said Palm Desert resident, Stacie Passmore.
"I believe in the food stamp system, I just think they need to do a little bit more guidelines for people that need it rather for people that just apply for it and get it," said La Quinta resident, Todd Manzo.
The California agency overseeing the program, the Department of Social Services, says the overwhelming majority of people use the program appropriately.
"Three quarters of the caseload are individuals that are considered the working poor, those would be working families and they're using those benefits to supplement their nutrition needs," said Deputy Director of Public Affairs for the Department of Social Services, Michael Weston.
The benefits are put on an EBT card, which is very similar to a bank debit card
"Which provides a way for recipients to spend CalWorks benefits, CalFresh benefits, and other public assistance benefits that they may have so when you see people using those cards they could be using them for a number of different programs," said Weston.
In the past five years, the number of people using the CalFresh program has skyrocketed.
"For obvious reasons related to the economic downturn, with that now we have more than 4 million people in California who are using these benefits to supplement their nutrition needs," said Weston.
SNAP participation nationwide has skyrocketed, 28 million people used 34 billion in benefits five years ago.
Last year, 46.6 million people were using nearly 75 billion -- the benefits have more than doubled.
"Those numbers are kind of sad to tell you the truth, it tells you that we're moving in the wrong direction, as a whole country wise," said Passmore.
"It's almost a double edged sword, there is more need, but it also draws the criminals in saying hey there's more money, there's more people with these cards, there's more opportunity for fraud," said Merrill.
Special Assistant US Attorney, Stephen Merrill, says they aggressively prosecute these types of cases.
"It's a serious consequence, it's a felony, it's a felony offense if you exceed 5,000 dollars, you're looking at prison and fines, and loss of property potentially," said Merrill.
Merrill is a deputy district attorney with Riverside County, but assigned to work with local US Attorney's Office, so he can prosecute in federal or state court and work with federal resources.
"A lot of overlap, sharing of resources so that we can maximize the taxpayer's dollars in coming after criminals," said Merrill.
In the last five years nationwide, the Office of Inspector General did 779 SNAP investigations, resulting in nearly 1,000 convictions and recovering 186 million dollars
In December, California accepted more than 15,000 investigation request; in Riverside County, more than 2,500.
"This program is intended to help people, and when you have people that are doing fraudulent activities, it creates a doubt for a program which real intention is to help supplement the nutritional needs of a large portion of society that really needs this assistance," said Weston.
Businesses have to apply to be allowed to accept EBT cards and SNAP benefits.
But abuse can result in millions of dollars stolen.
"I personally in my career have seen cases well in excess, multi-million dollar cases for food stamp fraud."
And who is that ultimately costing? "That ultimately comes from the US taxpayer, it comes from the Treasure of the United States." said Merrill.
People we spoke with want to see that abuse of the system targeted, so their tax dollars are spent on people who really need it.
"Once you have that kind of a problem there's more than just an easy fix, you have to go to the core and go on down the line," said Manzo.
"I actually approve of food stamps if they get to the right people, which seems to be an issue in this country, people taking advantage of a program that was meant to help those that are really in need," said Wilkolaski.
Many people desperately need the food stamp program to feed their families.
But if you do see food stamp fraud, you are encouraged to alert law enforcement because that misuse is stealing money from you, the taxpayer.