Food stamp fraud

As the Food Stamp program increases to monumental size (more here), it’s only natural that waste, fraud, and abuse increase proportionately.

This story describes the situation in Detroit.

Fraud in the government program that helps the poor has added up to nearly $100 million since 2007, according to the U.S. Agriculture Department. It’s a fraction of the more than $40 billion spent to feed people each year, but the crime has become a brazen way for some small stores to literally swipe cash from the U.S. Treasury, especially in the Detroit area.

There have been at least 122 fraud-related convictions of owners or employees in the five-state Midwest region since 2007, nearly double the number from 2004-06, says USDA, which oversees the welfare program. About half of those have occurred in southeastern Michigan.

Among the latest cases: A store west of downtown Detroit is accused of selling bags of the exotic chewy drug khat in exchange for food-stamp benefits. Agents in another investigation discovered that cash was wired to Somalia and other countries.

This is nothing new – the program has been rife with fraud since its inception. I would bet that the $100M fraud figure is on the low side.

Before I left NY in 1994 I lived in one of the seedier neighborhoods in Albany. There was a small market up the street which charged about twice as much for everything as a regular supermarket. I went there every day for the newspaper (which they couldn’t overcharge for) and every day I saw people buying beer, cigarettes, lottery tickets etc. with Food Stamps. I tried for over a month to report this and finally gave up.



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