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July 22 2013

A SNAPPY, New Kind of Fraud...

Patrice J. Lee

The New York Post broke news this yesterday that food stamp recipients in the Big Apple and across the state are abusing their benefits by purchasing extra food and shipping it overseas to families and friends.

Using electronic debit cards loaded with funds to purchase food staples, food stamp recipients  load up their carts with nonperishable items like macaroni, canned milk, rice, beans and sausages that can survive a typical three-week journey.

According to a worker at a supermarket in Brooklyn, “Everybody does it.”

As our mothers taught us just because some people do wrong, it doesn’t give us a license to join them. Even when the goal to help out one’s family is right, this doesn’t excuse defrauding the already put-upon American taxpayer.

Taxpayers may be upset that U.S. dollars are going overseas but the critical issue is that the benefits are being diverted from their intended audience. This undermines the reason for the program. If caught recipients put their families at risk if they lose their own benefits—but then, if they’re shipping food overseas, they are probably doing just fine without them. And they probably feel confident that they won’t be caught—which is a big problem right there.

Officially, known as the Supplemental Nutrition Assistance Program (SNAP), the food stamp program dates back to the late 1930s when it provided under-nourished Americans with relief following the Great Depression. As of last September, 47.7 million Americans were receiving on average $134.29 per month in food assistance, which can add up if there are several people in one household receiving benefits. In New York, nearly 1.8 million low-income residents receive benefits.

In the late 1990s, paper food stamps were replaced by the Electronic Benefit Transfer (EBT), an electronic debit card system that allows state welfare departments to provide recipients with food and cash benefits. The move was designed to save the government money by nixing printing coupons, make benefits available immediately, and reduce theft and diversion.

Unfortunately—but not surprisingly—the EBT system still became target for other fraud and abuse. Remember reports that that people were using their welfare cash for cigarettes and booze? According to a recent USDA report on the SNAP program “trafficking” diverted an estimated $330 million annually from benefits – or about one cent of each SNAP dollar – between 2006 and 2008.

Often we highlight examples of an overreaching, overly reactionary, intrusive behavior by government agents into our lives. But this is different.

To clarify, enforcement is a proper and important role of government. For a program that can be an easy target for abuse federal and state officials should provide sufficient funding and tools for tracking and enforcement. For example, it’s reassuring to know that the Food and Nutrition Service (FNS) works to identify patterns of suspicious transactions and conducts undercover stings. In 2011 the USDA also announced new policies to attempt to curb waste, fraud, and abuse such as stiffer penalties for retailers.

However, is this enough? And even more is it public enough. Sometimes public exposure and embarrassment are a strong deterrent against bad behavior. Remember the days when supermarkets would post pictures of people who frequently bounced checks?

This story focuses on abuse in New York, but this likely happens in metropolitan areas with high immigrant populations. Port cities such as Boston, Miami, and Tampa would be wise to investigate the incidence of fraud among their welfare beneficiaries and install policies to punish and shame both abusers of the system and the retailers that knowingly accommodate bad behavior. And, of course—since these people obviously don’t need food stamps for their own use, they would be barred from receiving them.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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