From: hotair.com, by Jazz Shaw, on June 8, 2015, see the article HERE.
Apparently it’s government waste, fraud and abuse week here at Hot Air. (Then again, I suppose that’s pretty much every week these days if you’re masochistic enough to keep reading the news.) This time we check in with the the Supplemental Nutrition Assistance Program (SNAP) which was previously referred to as the food stamps program in various versions. Since we’re well into the 21st century now, using actual, paper stamps or other traceable documents is horse and buggy thinking, so recipients are routinely employing Electronic Benefit Transfer (EBT) cards for their purchases. Sadly, as you might expect, if there is a way to exploit new technology somebody will come along and figure out how to do just that.
Larry Benson, writing at Fraud of the Day, dredges up just one such example. A shopkeeper in Ohio was recently charged (not yet convicted) with conspiring with shoppers using SNAP to defraud the government for more than a million dollars.
The Food and Nutrition Service reports that the Supplemental Nutrition Assistance Program (SNAP) paid out more than $74.1 billion in benefits to approximately 46.5 million Americans in 2014. An article posted on Ohio.com states that a small SNAP-approved store owner is accused of defrauding the food stamp program of approximately $1 million.
Prosecutors assert that for more than two-and-a-half years, the small store owner received about $1.5 million in electronically transferred benefits through his company’s bank account. It also says that he allegedly kept a little over $1 million for himself after making a series of small ATM withdrawals.
According to court documents, he carried out the scam by running Electronic Benefit Transfer (EBT) cards for a little more than $100 per transaction and gave the customer about half to buy prohibited items including alcoholic beverages and cigarettes. (Under the SNAP program, beneficiaries can use their EBT cards to buy approved items such as bread, milk, cereal, fruits, vegetables and dairy products.)
It seems the owner was caught in a sting when the feds sent in someone undercover to check on him. The rocket scientist in question seems to have gotten a bit greedy after the idea for the alleged scam came to mind and his SNAP sales shot up from $9,000 to $100,000 a month. That would be hard to explain even if every other store in the area had burned to the ground.
Again, these are still allegations at this point and the store owner is innocent until proven guilty. But it sounds like the feds have a pretty strong case or they wouldn’t have moved forward in such a vigorous fashion. Assuming this turns out to be true, there is a larger question to be examined here. We’re talking about one single shop owner in one city. If it’s that easy to scam the system (and clearly it is) then surely this isn’t the only guy who thought of this. And he allegedly got away with a million dollars in just a couple of years. Multiply that out by a couple of shops in every major population center in the country and the numbers could quickly become staggering.
The incentive for abuse clearly exists. Since you are not allowed to use SNAP funds for luxury items such as tobacco and alcohol but those items are desired, the alleged scam set up here is just a no-brainer. Even when paper food stamps were the norm we saw countless incidents of people who were willing to buy them from recipients with cash at roughly fifty cents on the dollar. It’s a great deal for the buyer since they can then effectively buy their groceries at half price. The benefits recipient gets to convert the limited use stamps (albeit at a huge financial loss) into cash so they can purchase whatever they wish. Let’s face it… it’s a system which is almost designed for abuse and the government simply doesn’t have the resources to chase down every single person doing it when the total number of recipients is in the tens of millions.
The real question is, what do you do about it? How does one design a scam proof distribution system when criminals are frequently clever and always working on new and inventive ways to beat the game?
I don’t know why this should be a surprise – if there’s a way to game the system to pocket hefty profits, thugs and gangsters will find it – it’s inevitable, like death and taxes. And with anything administered by the government, waste and fraud are always a “cost of doing business.” In the history of government has there ever been a documented case of waste and fraud being found and corrected? Probably a few, but considering how many candidates for office have promised to “clean it up,” you’d think that waste and fraud would have been eliminated by now.
Bureaucrats are paper-pushers, bean counters, and chair warmers, they could care less about efficient disbursement of taxpayer funds. Perhaps we should consider funding new programs and expenditures by requiring that they be paid for with funds saved by cleaning up fraud and waste in other existing programs. I’ll bet that cleaning up Social Security Disability or Medicare could pay for a bunch of new programs if Congress were FORCED to do it.