Fraud: More People Selling Food Stamps for Cash

Katie Pavlich | August 19, 2013 8:32 AM

As the food stamp program has become more bloated than ever in recent years, more and more people have used the program to engage in fraudulent practices.

The percentage of Americans selling their food stamps back to stores for cash has increased by 30 percent over the past several years, according to a new Agriculture Department study.

The study on food stamps trafficking -- which the agency said included “covert investigation” in stores -- compared the periods of 2006 -2008 to 2009 -2011.

Despite the increase, trafficking has declined since the 1990s, when the rate was nearly 4 percent of food stamps, also known as Supplemental Nutrition Assistance Programs benefits.

The total amount of SNAP benefits is now at roughly $858 million, compared to $330 million annually in the 2006-2008 period.

The increase reflects the overall growth in SNAP participation and benefits, the agency said in the August 2013 report.

Recipients typically sell back their benefits at a discount, according to the agency, which said its undercover investigations and research into electronic SNAP transactions focused on stores that showed “suspicious activities.”

This news comes just months after the New York Post exposed people using food stamp and other welfare benefits to buy porn, alcohol and lap dances at strip clubs.

They’re on the dole — and watching the pole.

Welfare recipients took out cash at bars, liquor stores, X-rated video shops, hookah parlors and even strip clubs — where they presumably spent their taxpayer money on lap dances rather than diapers, a Post investigation found.

A database of 200 million Electronic Benefit Transfer records from January 2011 to July 2012, obtained by The Post through a Freedom of Information request, showed welfare recipients using their EBT cards to make dozens of cash withdrawals at ATMs inside Hank’s Saloon in Brooklyn; the Blue Door Video porn shop in the East Village; The Anchor, a sleek SoHo lounge; the Patriot Saloon in TriBeCa; and Drinks Galore, a liquor distributor in The Bronx.

Food stamp use jumped two percent from 2012-2013 and 15 percent of the U.S. population is enrolled in the program. Republicans have proposed a five percent, or $40 billion, cut to the food stamp program.

House Republican leaders are to present a bill that would cut the food stamps program by $40 billion over 10 years, a move opposed by Democrats.

Republicans say the program, whose enrollment soared after the 2008-09 recession, is unbearably expensive at $78 billion a year.

Democrats such as Rep. Jim McGovern of Massachusetts say food stamps mitigate hunger in a still-weak economy.