CALL 6: Lawmakers scrutinizing food stamp fraud

Indiana says problem is 'minor'
Posted: 4:43 PM, Jul 06, 2016
Updated: 2016-07-06 19:59:38-04

INDIANAPOLIS -- Federal lawmakers voiced concerns Wednesday about fraud in the nation’s food stamp program, also known as SNAP (Supplemental Nutrition Assistance Program).

Members of the House Committee on Agriculture grilled the USDA about uncovering fraud and how to improve the integrity of the program. 

The hearing comes after an Ohio audit uncovered dozens of dead people still receiving thousands of dollars in food stamp benefits and $29 million spent out-of-state , which indicated people moved out of Ohio or sold their cards.

At least 12 states conduct special, in-depth audits of SNAP, according to the Ohio Auditor of State’s office, but Indiana is not one of them.

“You have to have a real reason to do it,” said Paul Joyce, State Examiner for the Indiana State Board of Accounts. “Those types of program integrity audits can be very costly in terms of manpower.  We would need to make sure it’s worth it.”

Rep.  Marcia Fudge (D-Ohio) questioned during the House Committee on Agriculture hearing Wednesday whether such state audits are worth the cost .

“There was actually $31,000 in fraud found and the audit cost $48,000,” Fudge said.

More than 723,000 people receive SNAP benefits in Indiana, down 15 percent from a year ago, according to the Family and Social Services Administration.

In Indiana, FSSA administers the SNAP benefits through the Hoosier Works card.

FSSA has an investigative unit of 25 people who look into SNAP, TANF, Medicaid and other program fraud.

“The most common type of fraud would be just not reporting employment that would make them ineligible,” said David Smalley, FSSA deputy director of policy.

FSSA looks for red flags such as someone who frequently replaces their card or makes out-of-state transactions.

“If someone is making a purchase in Florida over multiple days and weeks that would indicate you're no longer a resident of Indiana,” said Smalley.

FSSA also tracks data from the Department of Health to verify births and deaths, as well as employment data with the Department of Workforce Development.

Between April 2015 and March 2016, more than $1.1 billion in SNAP was issued to Hoosiers, but less than 1 percent of that was considered fraud, according to FSSA.

“Our numbers reflect a minor problem,” said Smalley. “However, we’re going to pursue it to the utmost level.”

Indiana retailers who commit fraud primarily fall under the USDA’s jurisdiction, however, FSSA can investigate Indiana SNAP recipients who shop at fraudulent retailers.

FSSA launched a public awareness campaign in February, emphasizing that SNAP benefits are for food only, and not for trading.

Those who defraud the food stamp system can lose their card for a year, permanently, or even face criminal charges.

In 2015, Marion County prosecutors charged at least five women with conducting food stamp-related schemes.

FSSA initially uncovered the fraud and reported it to the feds and the Indiana Inspector General.

CALL 6 | Four charged with welfare fraud | Former state-contracted workers under investigation for food stamp fraud

In September, Tarita Vaughner was convicted of welfare fraud and corrupt business influence and sentenced to two years in Community Corrections and two years of probation.

She is also ordered to pay $24,805 in restitution to FSSA.

Leticia Falconer was convicted earlier this year of welfare fraud and forgery and sentenced to community corrections and probation.

She was ordered to repay the government $79,489.

FSSA is asking anyone with information on food stamp fraud to report it.

“We represent the taxpayers, and this is taxpayer dollars,” said Smalley.

You can report food stamp fraud several ways: