SNAP/EBT fraud

Craigslist makes turning food stamps into cash a SNAP

By Perry Chiaramonte

Food stamp recipients are turning the government handouts into quick cash with ads on Craigslist, despite efforts to stem fraud.

The federally-funded grocery assistance coupons -- which are issued by states in the form of debit cards under the Supplemental Nutrition Assistance Program (SNAP) -- are being sold on the online bulletin board as well as auction sites like eBay. FoxNews.com found several offerings at Craigslist sites around the country, where the sellers offered the welfare benefits at large discounts from face value.

“If you need food. This is not a gimmick or game,” read one posting from Philadelphia. “Please let me know, I have food stamps for sale..... Serious Replies only!!!”

“I have $500 worth and it costs $350 cash. No I will not do half!” read another posting from the Atlanta area. “I don't need to sell. If you would like to get an extra $150 to $175 in grocery and pay no taxes and can see the benefit that you will still be saving then email me or call me and we can arrange the whole deal as soon as you like.”

Those who are desperately hungry are also taking to the website, offering cash for the stamps.

“DO YOU NEED SOME QUICK CASH?? -- $100 (atlanta),” read the title of one such post, under which the buyer offered: "If you get Food Stamps and need some extra cash then hit me asap,” reads the post.

In another posting from the Trenton, N.J., area, the seller claims that he will have a $100 EBT card available on Nov. 1 for $60.

Contacted by FoxNews.com and asked about the legality of such a transaction, the seller cryptically responded: "Lol are u serious is the govt legal of course but I hve a customer Good day [sic]."

The coupons are not supposed to be transferred, and Craigslist's policy lists them among the items that are not allowed to be sold or bartered on the site. But unless someone flags such a post, there's little the sites, which operate in small, medium and large markets around the country, can do. Critics suspect sellers either don't need them any more because they have found work, or simply want to exchange them for cash so that they can buy drugs or other items that are not permitted under the rules of the program.

"Fraud and abuse do take place in the food stamps program," Rachel Sheffield, policy analyst, Heritage Foundation's DeVos Center for Religion and Civil Society said to FoxNews.com. "There are other types of fraud that also are problematic, such as recipients receiving excess benefits by failing to report a new job or an increase in their earnings.

"To reduce this type of fraud, states should be required to cross-check the food stamp rolls against the National Directory of New Hires. Those who have failed to inform the food stamp office of new employment should have their benefits suspended."

Sheffield also suggests that adults recipients should be required to re-certify for the assistance program every three months to help prevent widespread fraud.

Nearly 50 million Americans are on the food stamp program, which has exploded over the last five years, more than doubling the cost to taxpayers. The Electronic Benefits Transfer (EBT) cards are issued to needy citizens who qualify, and then replenished each month with buying power. Because the cards do not include a photo ID, a recipient who is looking to sell his or her benefits for cash can simply do so and then report them stolen or lost and be issued a replacement. They could also charge a buyer much more, and never report the card as missing, effectively transferring their entitlement benefits for cash.

In May of 2012, the USDA attempted to curb the practice by giving individual states more authority to investigate residents who request multiple replacements of SNAP and EBT cards. Those who requested more than four replacements in a year would have to explain why they lost cards, and could face being cut off completely.

“The U.S. Department of Agriculture has zero tolerance for SNAP fraud," a USDA spokesperson said in a statement to FoxNews.com. "We recently provided stronger tools to help State agencies—responsible for pursuing recipient fraud—crack down on individuals attempting to sell benefits online. In addition, since 2011, we have worked with online marketplaces, including Craigslist, to better monitor and put a stop to the illegal sale of SNAP benefits. USDA encourages anyone that has information regarding potential recipient fraud to report this information to the USDA Office of the Inspector General or to their State agency.”

With one in every seven Americans on food stamps -- up a million since June of last year -- the impetus to cut down on fraud is rising. According to reports, nearly 850,000 people were investigated for possible SNAP fraud in the United States and 1,200 stores were permanently removed from the food stamp program for illegal conduct.

"Since 2008, the cost of SNAP has more than doubled from $34 billion to $74 billion," according to Rep. Kevin Cramer, R-N.D. who said in a recent press release that the Obama administration has allowed food stamp enrollment to explode, even beyond what an ailing economy might account for, in part by not pressing states to crack down on eligibility requirements.