Feds Give South Carolina $300,000 to Fight...Food Stamp Fraud

The U.S. Department of Agriculture has given a $300,000 grant to South Carolina to set up a pilot program for going after food stamp fraud and traffickers.

People walk past an Electronic Benefits Transfer (EBT) station, more commonly known as Food Stamps, in the GrowNYC Greenmarket in Union Square in New York City. (Getty Images)

Food stamp use has skyrocketed in recent years with a weak economy to a monthly average of 47.6 million uses, costing $80 billion in 2013. That’s almost double the pre-recession monthly average in 2008 of 28.2 million, costing taxpayers $37 billion.

The South Carolina program will add investigators and prosecutors to conduct more probes to bring felony trafficking convictions for food stamp fraud. If successful, it could be used as a national model for rooting out corruption in the Supplemental Nutrition Assistance Program, Stateline reported.

Trafficking, in this context, describes the crime of selling food stamp benefits for cash or using the SNAP benefits for personal profit instead of buying food.

“It’s what you hear about when people talk about SNAP fraud,” Karama Bailey, acting deputy for economic services in the South Carolina Department of Social Services told Stateline. “It’s hard to identify. We know it’s going on, but we can’t quantify it.”

State officials say social media has made the problem more widespread, with traffickers actually posting their intended crime on Facebook, Twitter and Instagram. The state’s prosecutors already have two cases that exceed the $2,500 floor for bringing a case.

Error rates are down since the 1990s, according to the USDA, despite the increased use of food stamps. But that’s different from trafficking. Errors are generally classified as giving food stamps to someone who is not qualified. Families of four with an income of $2,584 per month or less would qualify for SNAP.

Most previous enforcement has been against the retailers.

“Because illegal trafficking takes two parties, USDA investigates retailer fraud, and works through our state partners to investigate recipient fraud,” USDA undersecretary Kevin Concannon said. “Recipients who purposely commit fraud are subject to disqualification.”

The USDA’s most recent numbers found that 85 percent of food stamp fraud occurs in smaller stores, even though smaller stories make up just 15 percent of all transactions. The larger stories have better technology to detect fraud.

In 2013, the USDA permanently disqualified about 1,400 stores over fraud violations. So far in 2014, about 1,100 more stores were disqualified. Stores were accused of giving cash in return for the food stamps, paying about half the value to the recipient.

But the tougher line has drawn controversy in South Carolina.

“I feel like it came out of the blue, it’s not something I’ve heard we had a big problem with in the state,” said Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center told Stateline. “There are so many things they could be doing that are client-focused, helping people access benefits (and) the right amount of benefits.”