Food for Fraud – Is a Lack of Investigators Allowing Food Stamp Fraud to Proliferate?

Even though an estimated one out of every eight people in the United States is currently receiving food stamp benefits as part of the Supplemental Nutrition Assistance Program (“SNAP”) – the highest level of participation in the food stamp program since it began in 1939 – the last five years have seen a 20% drop in the number of investigations conducted by the USDA’s Food and Nutrition Services branch, which oversees SNAP.  Indeed, while there are now 193,753 merchants nationwide that participate in the program, the total number of investigators employed by Food and Nutrition Services stands at just 40.

“It’s ridiculous,” Patrick Burns, with Taxpayers Against Fraud, a non-profit public interest group based in Washington, D.C., said of the few investigators assigned to probe food stamp fraud and trafficking by retailers. “Our ability to ferret out fraud is directly related to the number of ferrets we have, which is why we don’t ferret out much.”

One of the biggest concerns raised by the current system is the amount of “trafficking” in food stamps.  Certain, unscrupulous, retailers will purchase food stamps from the beneficiaries of the SNAP program for 50 cents on the dollar.  According to the government, the amount of food stamp trafficking stands at just 1%, or about $241 million, down from 3.8% ten years ago.  According to the government, electronic monitoring through the digital tracking of redemptions via the debit cards used by food stamp recipients, have enabled the USDA to combat food stamp fraud even as the number of beneficiaries of the SNAP program has exploded in recent years.

Critics such as Burns, however, remain skeptical.  He points out that it is difficult to imagine such a low rate of fraud in a program as sprawling as SNAP, with $50 billion in benefits paid out yearly to nearly 42 million Americans.  “The first job of a government agency is to pass the laugh test and I’m not so sure a 1 percent leakage in the food stamp program does that,” Burns said. “I don’t believe they have a clue to what their fraud rate is. They’re just guessing.”

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