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Feds hope new rules will help curb food stamp fraud

Published: Thursday, May 24 2012 5:55 p.m. MDT

Jennifer Velazquez hands over some tokens in payment for some fruit as she shops with her family with food stamp tokens Tuesday, Oct. 25, 2011 in the last Farmers' market at Pioneer Park in Salt Lake City.

Scott G Winterton, Deseret News

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SALT LAKE CITY — It costs taxpayers $750 million per year, and the same problems are cropping up in new forms.

People are now committing food stamp fraud by hawking their stamps and electronic benefits transfer cards on websites like eBay and Craigslist.  

Now the federal government is proposing new rules to help states combat against the fraud. The U.S. Department of Agriculture wants to give states more power to investigate people who claim they repeatedly lose their cards. Under the rule, states would be allowed to ask for a formal explanation when a recipient has requested more than three cards in a year’s time. Depending on the outcome of the investigation, someone could be declined additional cards.

"Up to this point, the state's hands have been tied unless they absolutely suspected fraudulent activity," said Kevin Concannon, the department's undersecretary for food, nutrition and consumer services.

Food stamp fraud isn’t as prevalent as it used to be in Utah, primarily because of a switch to debit cards with PIN numbers, Crossroads Urban Center associate director Bill Tibbitts said Thursday.

Still, Utah Department of Workforce Services spokesman Curt Stewart confirmed investigators do get called about these kinds of online problems.

The department is optimistic about the impact the new rules will have.

“I have never lost a card — that’s just me,” Stewart said. “It’s a good indicator that something might be going on, gives us the chance to ask the question and if we can ask the question and we’re not satisfied with the answer, then we can move ahead.”

Losing that many cards in a year is rare, advocates said. Tibbitts said a homeless person may lose “everything” once or twice in a year.

“Three or four times a year — I’ve never heard anybody talk about having that kind of trouble,” Stewart said.

Another advocate, Utahns Against Hunger executive director Gina Cornia, suggested the fraud has an impact on well-intentioned recipients.

“Such a small percentage of people who use those benefits fraudulently really make it difficult for the people who use them honestly,” Cornia said. “That kind of scrutiny doesn’t help anyone.”

Cornia did say she was in favor of the new rules.

The $750 million lost annually to fraud equals about 1 percent of the federal program’s $75 billion budget.

At the Department of Workforce Services office in Salt Lake City, 720 S. 200 East, food stamp applicant Richard Tyler Jones appeared disgusted that people were taking advantage of the system.

“Scandalous. I think it’s scandalous,” Jones said. “People are using the government’s money. It’s not their money.”

Jones said government workers have been good to him as he has dealt with unemployment. He said he has seen people on Facebook offer food stamps on Facebook for money, food or even alcohol.

“Anybody who’s abusing the system needs to think twice,” Jones said.

Last year, the department sent letters urging eBay and Craigslist to notify customers that it's illegal to buy and sell food stamps. USDA officials followed up last month, saying they are still getting complaints that people are using the websites to illegally market food stamps.

Both eBay and Craigslist have told the government they are actively reviewing their sites for illegal activity and would take down ads offering food stamp benefits for cash. The USDA also has warned Facebook and Twitter about the practice.

Contributing: Associated Press

E-mail: aadams@ksl.com

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