Feds, States Target Food Stamp Fraud

With a record 46 million Americans getting food stamp benefits, the U.S. Department of Agriculture is leaning on states to be more vigilant in finding fraud among those who get food stamps and retailers that accept the benefits.

USDA announced December 6 new tactics states can use to root out fraud in the food stamp program. For example, states can crack down on folks trying to sell their food stamps for cash on Facebook and other social media without waiting for a sale to actually take place, USDA Under-Secretary Kevin Concannon explained in a conference call with reporters. The intent to sell has the same punishment as actually selling the benefits, he said, which includes disqualification from the food stamp program, formally known as Supplemental Nutrition Assistance Programs or SNAP .

He said Craigslist was very responsive when the feds alerted the website that someone was trying to sell food stamps. The site now clearly lists food stamps among its prohibited items .

For the nearly dozen states that have container deposit laws for bottles, the USDA also is working on a new rule that says food stamp recipients can be dropped from the program for a scam called "dumping." This involves using food stamp benefits to buy a beverage that has a deposit, then promptly dumping out the beverage to redeem the bottles for cash. While the deposits in most states with these laws are typically just a nickel or dime per bottle, Concannon says in Maine deposits on half-gallon organic milk bottles are between $2.50 and $3. In Iowa, deposits on large office water bottles are $7. As Stateline has reported , bottle-bill legislation has re-emerged as an issue in 23 states, in part, to reduce litter.

Before the recession, food stamp trafficking diverted about 1 cent on the dollar, down dramatically from 4 cents on the dollar in 1993. With more people getting food stamps, USDA says it wants to make sure the 1-cent level doesn't increase.

Federal and state officials also are working together to warn food stamps recipients against online scams that promise to provide help in filling out SNAP applications, when in fact the recipients are tricked into providing their credit cards numbers.

Fraud can be reported at (800) 424-9121, online and to state fraud hotlines .

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