Michigan reimbursed $131k of stolen food stamps in 7 months | Michigan

(The Center Square) – Swiping a card at a grocery store register, the buyer might be spending their own money or taxpayer benefits stolen from a vulnerable person.

The state of Michigan reimbursed $35,760 of reported stolen Food Assistance Program benefits in September 2022.

From June 2022 through the end of the year, the Michigan Department of Health and Human Services reimbursed $131,753 to residents who reported stolen funds, according to documents The Center Square obtained through a Freedom of Information Act.

The amount MDHHS reimbursed monthly during that time ranges from $4,400 in December to as high as $35,760 in September.

Over those seven months, the state reimbursed an average of $18,882 of benefits each month. The Center Square interviewed multiple security experts who’ve deemed electronic benefits transaction fraud a national problem. So far, Michigan has caught $6 million of pandemic fraud and $4 million of food stamps fraud, the latter mostly at Sam’s Clubs in metro Detroit stolen from Californians using cloned cards. 

Most of the reimbursements flowed to Wayne County, with a few in Saginaw, Ingham, and Macomb County. 

As of April 2023, the state has reimbursed $73,030 for the Food Assistance Program this year. 

• Jan: $2,590.
• Feb: $26,540.
• March: $30,850.
• April: $12,050.

The state health department referred some of the claims to the Office of Inspector General, a fraud watchdog.

Scammers can steal money in many ways. For example, a customer can distract a retail clerk long enough to deploy a skimmer on the point of sale; a rogue employee could place a skimmer; or a scammer could take over someone’s account via a compromised password or other personal information.

Unsuspecting customers can have their accounts drained after using the skimmer, which can leave vulnerable families hungry.

The Congressional Research Service notes four types of inaccuracy and misconduct in the Supplemental Nutrition Assistance Program.

• Trafficking SNAP benefits is the illicit sale of SNAP benefits, which can involve retailers and recipients.
• Retailer application fraud generally involves an illicit attempt by a store owner to participate in SNAP when the store or owner is not eligible.
• Errors and fraud by households applying for SNAP benefits can result in improper payments. Errors are unintentional, while fraud is the intentional violation of program rules.
• Errors and fraud by state agencies – agency errors can result in inadvertent improper payments; the discussion of agency fraud largely focuses on certain states’ Quality Control misconduct.

A 2021 report from the United States Department of Agriculture found that food stamp trafficking – the illicit sale of SNAP benefits – is more likely to occur in poorer and urban neighborhoods.

USDA’s Food and Nutrition Services is responsible for identifying stores engaged in retailer trafficking – using transaction data analysis, undercover investigations, and other tools – and imposing penalties on store owners who commit violations. Retailers found to have trafficked may be subject to permanent disqualification from participation in SNAP, fines, and other penalties.