Friday, February 26, 2010

Exclusive: Fraud and abuse by food stamp recipients

With the debate over yet another federal unemployment extension taking place in the Senate, and with recent news that the number of families receiving food stamps (now formally called the Supplemental Nutrition Assistance Program) is on the increase, we were alarmed when we heard of a growing system of food stamp fraud that is helping fund the purchase of illegal drugs in parts of rural Kentucky, especially the eastern mountains.

The scheme goes something like this: Food stamp recipients purchase large quantities of soft drinks with their food stamp benefit cards. They then sell this pop to retail outlets for cash at a cost significantly lower than the retailer has to pay the drink distributor. The retailer sells the pop again, and the individual who sold the pop uses the cash to buy drugs. Apparently this is a very popular and common scheme (or scam) in many areas, yet we've never seen anything in the press about it or any law enforcement activity centered on the practice.

We're outraged and offended by this scam on many levels. First, it's preposterous that soft drinks are even eligible for purchase with food stamps. At a time when soda pop is coming under fire from nutritionists, and WIC recipients are limited to purchasing store brand milk and other dairy products over name brand products, it's hard to believe that soft drinks are on the eligibility list for food stamp purchases. We couldn't believe it, but we looked it up and soft drinks are not on the list of prohibited items. Indeed, one state tried six years ago to get the federal government to allow it to make soft drink purchases ineligible for the food stamp program, but that request was denied.

What would we like to see done about this debacle? First, it's time that Congress passes a law making soft drinks ineligible for purchase with food stamps. There is absolutely no logic in having the taxpayers subsidize the consumption of something that not only has no nutritional value, but is considered detrimental to good health by many.

Next, it's time for a crackdown on this fraudulent practice. Until such time that soft drinks are made ineligible for the program, limits should be imposed on the amount of soft drinks that can be purchased with SNAP benefit cards. Surely there is a way to track purchases and to deny payment for any pop purchases beyond a certain level.

Years ago, it was common to hear that a business that had made improper food stamp sales was suspended from participating in the program. This was usually a stiff punishment for the business because many rural stores depend on food stamps for a large portion of their revenue. If stores that accept food stamps are found to be buying soft drinks from SNAP recipients and paying cash for them, their food stamp sales privileges should be suspended or revoked.

Finally, the individuals who are doing this should be punished. Food stamps are meant to provide nutritious meals to needy families. Individuals who buy pop and then sell it for cash to buy drugs are taking food off the table for their families. This fraudulent practice should be dealt with severely. This also helps subsidize the illicit drug trade that plagues our state and claims so many lives.

Even though this seems to be a popular and growing scam, we have yet to read or hear anything about it in the media. If any media representatives are viewing this (and we know at one time that you did read this blog), this is fertile ground for a blockbuster story. Start asking around in the rural areas of the state and see what you uncover. And we challenge other bloggers who read this to link to it and spread the word to help end this abhorrent practice.


At 12:13 AM, February 28, 2010, Blogger The Serial Rider Chronicles said...

This has to be on overexaggeration. How many small stores are in rural Ky vs. the number of benefit recipients? Everyone can't sell to these stores, the store owners can't have enough crack money for every food stampers. This story reminds me of the Reagan tale of "welfare mothers driving Cadillacs and buying steak". There is welfare fraud. yes. An epidemic, I doubt it.

First time visitor, I'll come again.

At 12:21 AM, July 10, 2010, Anonymous Anonymous said...

If you have real knowledge of such practices, you have an obligation to report the individuals involved. This may mean children going into foster care and parents going to prison, but it will also mean doing your civic duty. You might even get a reward!No chance of saving a government dime here, fraud is fraud and per dollar, food stamp fraud is small potatos.

At 12:55 PM, September 03, 2010, Anonymous Anonymous said...

The reason that the small stores buy the pop is because the pop distributors won't sell them the pop at the same price as the groceries stores or other small stores that they are friends with. I have a small store and have to go to the bigger groceries stores and buy it to be competitive. Another local small store just like mine gets it at the same price as the big grocery stores because the distributor tells me that that store is classified as a grocery store. WTF, it is the same as mine, sells groceries and gas, but mine is classified as a convenience store. Apparently, I don't know the right people at the distributor (PEPSI). If the distributors would sell it fairly to everyone this would solve the food stamp fraud problem. It would make the small stores happy. Case Closed.


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