Audit finds risk of fraudulent activities on Electronic Benefit Transfer cards used by welfare recipients
  • Audit finds risk of fraudulent activities on Electronic Benefit Transfer cards used by welfare recipients
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San Diego County officials have been playing fast and loose with the so-called Electronic Benefit Transfer cards used by welfare recipients to buy food and other essentials, according to a July audit. In addition to groceries, a multi-million-dollar federally funded program called CalFresh allows homeless senior citizens over 60 to use the cards for meals at participating restaurants.

The cards are handed out by 13 so-called family-resource centers that auditors say need to tighten their security. One of the centers “has the safe open all day until the last client is served,” and none have an “approval process for vault combination reset.” Lack of such legally required safeguards “may result in unauthorized access” to the benefit cards, says the audit. Additionally, two of the units have shredded cards without review, and two “have not maintained record logs for destroyed cards.” Concludes the report: “Lack of written policies and procedures on card destruction creates the risk of fraudulent activities.”

A July 9 response to the findings by the county’s Health and Human Services Agency promised to fix the problems. In June, federal prosecutors charged 54 defendants in Atlanta, Georgia, with buying the card-borne welfare benefits for cash “at a fraction of the amount they received…by redeeming the benefits they had purchased.”

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Comments

HonestGovernment Aug. 27, 2014 @ 1:29 p.m.

Another level of fraud: I looked up the CalFresh webpage for San Diego, and the participating restaurants. The goal, as expressed by Health & Human Services and SD County, "As part of Live Well, San Diego!" is "to support positive, healthy choices."

Using the search block and zip code 92101 for participating restaurants, page after page lists only Burger King, Domino's Pizza, Wendy's, Carl's, Weinerschnitzel, KFC, Pizza Hut, etc.

Healthy? No. A corporate gravy train? These national chain minimum-wage-paying fat havens are benefiting on the other end of the food-poverty chain they help create. A brilliant idea. Wonder who lobbied whom for this?

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AlexClarke Aug. 28, 2014 @ 6:44 a.m.

Well said. From what I can tell it does not take much to qualify for assistance you just have to know what to say and fill out the paperwork with the right words.

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Sjtorres Aug. 28, 2014 @ 9:26 a.m.

And they use the Food stamps to buy pizza and cokes at convenience stores. Get obese, sick, and then free Obamacare (all taxpayer funded).

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clockerbob Aug. 28, 2014 @ 10:41 a.m.

I'm lost? Could someone explain?

a multi-million-dollar federally funded program called CalFresh allows homeless senior citizens over 60 to use the cards for meals at participating restaurants. ..............................................The cards are handed out by 13 so-called family-resource centers that auditors say need to tighten their security. One of the centers “has the safe open all day until the last client is served,” and none have an “approval process for vault combination reset.” the picture above the story is a vault door so I guess what is a vault combination reset?

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HonestGovernment Aug. 28, 2014 @ 1:21 p.m.

AlexC and SJT - I have no problem with the Affordable Care Act or WIC/SNAP programs, or with people needing help. I do have a problem with dishonesty on any level.

clockerbob -This article refers to three separate things (I think): 1. A new program allowing use of food-aid benefits to purchase prepared food. 2. An audit of HHS centers that dispense the EBT cards to food-aid-eligible persons. 3. A federal indictment of grocery and other store owners who had conspired to become qualified by USDA to accept EBT cards, for the purpose of fraudulently exchanging cash, instead of food, for the EBT cards. The needy persons got cash instead of food, but less cash than the face value of the EBT cards. From an Augusta Chronicle story:

Once the purported stores were opened and approved as WIC and Food Stamp vendors, many of the defendants allegedly canvassed low-income neighborhoods and solicited WIC and Food Stamp participants to illegally exchange their benefits not for food, but for cash, the government said.

The defendants then allegedly bought WIC and Food Stamp benefits for cash at a fraction of the amount they received from the USDA by redeeming the benefits they had purchased. The defendants also allegedly conspired to launder more than $18 million in proceeds received from their fraud upon the WIC and Food Stamp programs.

Karen Citzen-Wilcox, the special agent in charge of the U.S. Department of Agriculture Office of Inspector General, said the investigation and prosecution “should send a strong zero-tolerance message to those individuals who create businesses for the purpose of specifically defrauding the taxpayer” benefit programs.

EBT cards issued by HHS are like ATM debit cards: each card has a total value representing the monthly amount that a food-aid-eligible person is entitled to receive. Each time that person visits a participating store, the value of the food they buy is debited electronically on the card.

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clockerbob Aug. 29, 2014 @ 9:17 a.m.

If a person is homeless and qualifies for food stamps that person should be allowed to purchase cook meals because that person has no frig or stove. I was aware of the fraud you mention & detailed above but fraud in article has:

13 so-called family-resource centers-----------------. One of the centers “has the safe open all day .................................

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