Honest Merchants Benefit From Honest Food Stamp Program

Written for the Ohio Grocers Association

Monday, April 16, 2012

Since 2006, more than 17,000 people have received 10 or more reissued food stamp cards from the State of Ohio. That’s a red flag that caused my office to examine the state’s procedures for managing food stamp cards, also known as EBT cards. We discovered that changes needed to be made.

Losing a card once or twice is understandable, but requesting replacement cards 10 times or more suggests a possibility that the card holder is engaging in fraud with the help of a dishonest merchant.

The scam starts with program beneficiaries who sell their partially used cards for cash to unscrupulous store owners for less than the amount loaded onto it—often for pennies on the dollar. The store owners then process the cards as though the full value was used to purchase goods and are reimbursed for the full amount by the state.

This is wrong. The food stamp program exists because we don’t want people to starve. The money behind food stamps is meant to feed the hungry.

My office evaluated the EBT practices and safeguards used by the Ohio Department of Job & Family Services (ODJFS) and discovered that the agency has not developed sufficient policies or procedures to fight this fraud. We recommended that ODJFS request the card service provider to supply statistical data to help identify individuals and vendors who should be investigated for dishonest practice. Getting a computer, a cop and an accountant in the same room will go a long way toward stopping this fraud.

We also suggested that ODJFS work with the federal awarding agency and the Ohio General Assembly to increase penalties for those who commit fraud against the food stamp program and to develop penalties for those who abuse the card reissuance process.

One thing I learned during my years as a county prosecutor is that, almost always, people know when fraud is occurring. Any crime is bad enough, but crime that takes advantage of people’s compassionate instincts and squanders scarce taxpayer resources meant to alleviate poverty is egregious.

I urge anyone with knowledge of such fraud to report it to the Auditor of State Fraud Hotline, 866-FRAUD OH (866-372-8364).