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July 20th, 2010
08:00 AM ET

'Scammed:' Your tax dollars buying smokes & beer

All 50 states and U.S. territories now provide Food Stamp Program benefits with EBT (Electronic Benefits Transfer) cards instead of traditional paper coupon stamps pictured above. (Getty Images)

(CNN) – For nearly 50 years, the government has helped feed struggling families across the nation through its Food Stamp Program. These days, instead of stamps, the government sends out debit cards funded by your tax dollars. The problem? Some people are illegally using those cards to get cash, beer, cigarettes, and worse. Our John Zarrella reports for the second part of our AM original series, "Scammed." Watch Video

Filed under: Crime • Scammed
soundoff (15 Responses)
  1. Flynn

    Its definetly preventable if you start closing down or taking the liquor licenses away from the low life corner stores that are committing the fraud. Problem lies with too many recipeints and not enough investigators.

    July 21, 2010 at 2:05 pm |
  2. Andrig Miller

    The governments estimate of 1% of the $50 billion has got to be very low in compared to reality. At 1% you are only talking about $500 million, but even that is a really large number, and shouldn't be taken lightly.

    This is a great example of how government run programs end up costing us much more than planned. First, you have the direct fraud in the program. Next, you have the added cost of the law enforcement, which will be a small dent in the fraud. Next, you have the court costs, jail costs, etc., for the folks that do get caught. The costs continue to pile up.

    The only reasonable approach to solving this problem without cancelling the program (which is a valid solution), is to make it so money never goes directly to the recipients in any form. In fact, you would probably have to turn it into a food bank program, and not allow any shopping of any kind.

    The government, and us tax payers, would be better off spending money directly on food items, and giving it to local food banks, and just directing people to those food banks.

    July 21, 2010 at 1:35 pm |
  3. How it works

    There are two types of benefits: EBT Food and EBT Cash. Only EBT Food carries restrictions on "food stampable" items. EBT Cash on the otherhand carries no restrictions – it's a free for all, including CASHBACK benefits. Anyone that wants to complain up the abuse ladder should reference EBT CASH (not EBT Food) tender.

    July 21, 2010 at 1:26 pm |
  4. Lisa

    I was standing outside a grocery store in Michigan and watched a guy sell his card for half it's value to a woman walking in the store. I guess the clerk didn't care that there was a man's name on the card.

    July 21, 2010 at 12:56 pm |
  5. TC

    Duh. This is not new information.

    July 21, 2010 at 11:59 am |
  6. Hypatia

    Oh get off the blasted soapbox! I'm sure you all are totally pure and clean and never, ever buy beer! You're all like the do-gooder groups at the turn of the 20th century: your focus isn't helping anyone but congratulating yourselves on being so blasted 'holy'.

    July 21, 2010 at 11:20 am |
  7. Kevin

    If you get caught buying cigarettes or beer, they should kick you off of welfare and not allow you to get back on it.

    July 21, 2010 at 11:04 am |
  8. Lloyd Love

    I have personally seen a store manager ring up an extra $20 on the Texas Lone Star Card and hand the customer a $20 bill, who then went back to the wine cooler and purchased wine with the cash.

    July 21, 2010 at 8:55 am |
  9. jim

    watched the video. it looks like the merchants are most at fault, especially gas staions and liquor stores. falsifying purchases for their own benefit. i think the crackdown needs to start there.

    July 20, 2010 at 11:43 pm |
  10. jim

    in michigan you can not buy cigarettes, beer or liquor on a bridge card (i.e. food stamps). i don't know the restrictions in other states, but i am pretty sure it is the same. because it is like a atm card, it is a lot harder to sell bridge card credits than it is physical food stamps, not that it doesn't happen. i am conservative, but i know people that rely on these. i know what they can and cannot buy. i think this is just another political issue that is used to get media attention. there will always be someone who can cheat the system. what we need to know is what the overwhelming majority is spending on these programs.

    July 20, 2010 at 11:28 pm |
  11. jms58

    This program is so riddled with fraud and abuse. I have watched this cancer spread as well as other programs like the earned income credit. I believe that anyone able to work should be required to earn these government give-a-ways.

    July 20, 2010 at 11:23 pm |
  12. Ben Stafford

    Welfare in most forms would not be as necessary if people would learn to make better choices. Case in point, person behind me in line at the grocery store was using a EBT card, fine. The clothing they were wearing was not inexpensive. For someone who could not afford to feed themselves they decided they had the money to pay a premium for their clothing. In the parking lot they had a car. Somewhat needed where we live but still did they need the upgraded stereo system it had. Cell phone? Really?

    "I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it." ~ Ben Franklin

    July 20, 2010 at 10:37 pm |
  13. nancy

    It's no different now then when they had stamps. A person can sell them for cash and get the booze & cigarettes. It's not ever going to stop.

    July 20, 2010 at 11:33 am |
  14. Michael Armstrong Sr.

    I live on Social Security and recieve food stamps in Texas the only thing my card pays for is food maybe other states should follow theTexas lead .

    July 20, 2010 at 8:58 am |
  15. howie

    perfect example of our tax dollars not being looked after, EBT , welfare, medicaid / medicare and section 8 housing programs are all being bilked for big bucks. if we could trim the fraud maybe we would ALL have universal health care. stopping fraud would free up allot of tax dollars for all of us, but our government turns a blind eye to this issue.

    July 20, 2010 at 8:54 am |