Posted by: Ann Corcoran | June 20, 2011

Maryland ranks second in the nation in food stamp fraud!

Boy, Governor Martin O’Malley is sure getting some great distinctions for Maryland.  Yesterday, we learned Maryland is last in the nation in job creation and now we learn we have the great honor of being second in the nation in food stamp fraud!

From the Washington Examiner:

The use of food stamps has soared in the D.C. region, but so has the cost of fraud, and Maryland now ranks second in the country in misappropriated food assistance funding.

The number of people receiving food stamps in Maryland has more than doubled since 2007 to nearly 677,000 as of April, or about 11 percent of the state’s population, according to the U.S. Department of Agriculture. In Virginia, use grew by 75 percent — more than doubling in Fairfax County alone. In the District, two of every 10 residents now use food stamps, up by a third since before the recession.

The food stamp program more than doubled to $65 billion annually over the last five years and abuse and fraud now account for $2 billion of that, the USDA reports. The causes range from simple computer glitches to outright lying by applicants.

Maryland penalized $350,000 and only recouped $572,000.

Maryland ranks second in the nation when it comes to losses because of improper payments, according to 2009 data, the latest available. Only Texas lost more. For every $100 in benefits, Maryland paid $5.66 to people who weren’t eligible. Virginia ranked seventh nationally with a rate of $4.68. The District actually lost the least, $3.35 per $100.

Maryland has since been penalized $350,000 by the federal government for its mistakes and is required to use that money to improve its payment system.

The states have recouped only part of those overpayments. In the first quarter of this year, Virginia got back $1.8 million of the $13.4 million it overpaid. Maryland got back just $572,000 of the $10 million it overpaid.

Those numbers reflect mostly the little welfare cheats, the big fraud is in trafficking in food stamps something I began following several year ago when a Pakistani Convenience Store owner was busted in Hagerstown for trafficking.   Basically how it works is that customers bearing food stamps enter the store and are given cash for their benefit at 50 cents on the dollar.  The store owner is then reimbursed by the Dept of Agriculture (the US taxpayer) for the full dollar.

Here is the Examiner on the cost of trafficking:

Food stamp trafficking, the illegal practice of exchanging food stamps for cash, poses further problems, costing about $1 for every $100 in assistance, according to the USDA. But only the most heinous cases actually make it to court, and many of the retailers who are sanctioned are eventually allowed to rejoin the food stamps program.

I’ve been following the heinous cases for years, which to a large degree involve immigrant-owned or managed convenience stores, at my other blog. Check out this story yesterday about all the Mohammad’s involved in food stamp fraud.  Oh, and by the way, the Hagerstown, Maryland scammer now serving time in prison is named Mohammad too!

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Responses

  1. I was the GM of a seafood restaurant for 3 years and was forced out for finally standing up for quite a bit of fraud with respect to this restaurant in Silver Spring MD and Germantown, MD. Although the owner didn’t traffic in EBT cards, he fraudulently accepted them ALL THE TIME for basically any hot cooked expensive seafood both eat in and carryout. I know the financial numbers because I did the reports at the end of the night and it was staggering how much money was taken in via EBT especially from the 11th to the 16th of the month. I wouuld say that maybe 3% of the money taken in was legitimate for items such as raw fish or uncooked shrimp. What bothered me was the underground pipeline of people who know that the restaurant “Seafood In The BUff” takes EBT for all food and is “cool”. After dealing with the same people and their cards day in and day out for over 3 years pulling up in their Mercedes Benzes, BMW;s , escalades, or other nice cars and using their FREE money to purchase expensive seafood such as $200 and up bushels of crabs as well as steaming hot KING crab legs etc., I finally got fed up and spoke up and was eventually forced out of my job. I know the do’s and don’ts restaurants must follow regarding EBT and it was always abused to the fullest extent at Seafood In The Buff giving this particular merchant a VERY unfair advantage over other restaurant owners who follow the rules. You don’t see McDonalds taking the card………….or Domino’s…………or Joe Blow Pizza shop. I made multiple reports to the USDA and EBT fraud lines both by mail, email, and by phone and after 7 months, nothing has ever been investigated. He has been investigated for other types of fraud I witnessed and paid some consequences, but this really bugs me the most. It’s like there is no one in the Gov that could even make a phone call or write a letter to the restaurant owner. You can call the shop any time and ask anyone over the phone if they take EBT and they will always say yes come on in or place your order over the phone for anything on the menu after asking if they accept EBT. I was thinking about contacting some group like 7 on your side to look into this widespread abuse but I have finally accepted the fact that no one really cares or there isn’t enough manpower to investigate these things. We are talking about thousands upon thousands of dollars per year this shop takes in on top of his regular business and it is blatantly wrong according to the EBT guidelines.
    Any suggestions for getting a response?????

    • Chris, that is incredible. The best suggestion I have is trying to get the press to pay attention. Or, maybe some conservative law firm would be interested. It usually takes either the press or a lawyer to snap government to attention.

      Readers, if you have any suggestions for Chris, please respond here. Or, if you have suggestions that you don’t want published then send them to me and I will forward to Chris. Write ann@vigilantfreedom.com

    • There is an online form that can be filled out and submitted. I am in the process of reporting EBT card fraud on both sides, EBT card holder & stores that accept EBT cards and give cash when there is NO cash assistance on the card. In 3 months, the card holder has cashed out over $1100.00 and it goes back as far as I can track, but only gives you 1 year of transactions. The yearly amount cashed out is phenomenal. Go here and click to report fraud on-line : http://www.dhr.state.md.us/blog/?page_id=4084

      • Thanks so much for this info! Will check it out!

  2. [...] distinction this week (on top of being last in job creation,here, and second in food stamp fraud, here)—Maryland to be the first state in the Nation to require a “green” proficiency [...]

  3. Chris,
    I understand your frustration. I too have reported fraud to our county Dept. of Social Service, USDA, and Office of Inspector General. I know of a woman who lost custody of her two children and was receiving food stamps, welfare, and medicaid. Prince Georges County actually paid her 8000 in one month of food stamps. I reported it they did investigate it and found all of this to be true. However, nothing happen to the lady she is driving around in a brand new car but has been living off the system for over five years with no qualifying dependents and working. What ticks me off is that all this fraud we as taxpayers are paying for our lazy people who just dont give a darn beause they know the system is weak and don’t care.

    • Hi Char, thanks for the comment. I think what we are seeing is just the tip of the iceberg for fraud. I’ve been following cases all over the country of food stamp fraud where convenience store owners and managers buy food stamps for cash at 50 cents on the dollar and then get reimbursed for the full dollar from the feds. It happened right here in Hagerstown where the guy, named Mohammad Khan ripped the taxpayers off to the tune of about a half million bucks—but he did go to jail… He should be deported when he gets out!

    • I am actually going thru he sane thing right now. In my case, not only was the agency allowing staff to use consumers EBT cards, but also were logging onto the Social Security website and posing as consumers to redirect their monthly federal benefits into a private account. I called and wrote the State of MD. NO response. So now, at 2.26pm on sat, I am waiting for officers to come to my house to file official reporfts on identity theft, conspiracy to defraud the Gov,t, and felony theft. Use the law if you can, All souls must be defended from unethical professional, and its oour responsibility to hold criminals accountable……..Michael-sean

      • Please keep us posted!

  4. I just sent ann an letter discribing in detail how certain employees are defrauding the food stamp program. Another problem I encountered is changing coupons for cash because most grocery store systems will not apply a coupon as a discount off the total and food stamp method of payment should take the lower amount. Instead the food stamp will take the full amount before coupons and then show a cash back for the total amount of coupons used. In other words the receipt shows that the total amount is taken and a cash refund on the amount of total of the coupons.

    • Thanks Sandra, am looking at your letter and will see if somehow we can get someone to pay attention!

  5. I sent a letter to DHR in Baltimore and Govenor Martin O’Malley office, however, I have tried to contact the government and department of justice before with I-9 Employment Eligilibilty fraud and never seen any action taken. So I believe that if we dont do something soon, the food stamp program will be bankrupt. I have called and spoke to Homeland Security and their response was, “Everybody is doing it”..

  6. I just left my position as a Family Assistance Specialist. I agree with many of your comments. The Federal Government has eased the average person’s requirements to receive assistance for both Food Supplements and Medicaid. Unfortunately, they are so lax, it is almost impossible to verify individuals who’s children moved out, have self-employment income or work in another state and are not reporting their income. Especially for Medicaid purposes, income is declaratory. Frightening but true. The offices are severely over-staffed and underpaid. My frustration with potential fraud and the stress of the amount of work and lack of recognition were the primary reasons for leaving. There is no time to process cases much less go after over-payments and make them comply with job requirements. The problems are systemic in nature and the system needs to be over-hauled.

    A correction to an above post, no one would qualify to receive $8k in Food Supplement benefits. The maximum for a household of one with $0 income is $200. It increases per person in the household after that. The benefit is supposed to be for non-prepared food only. I have seen in recent weeks that a few fast food places are accepting cards. I am unsure of the validity of this but hope that it will be investigated.

  7. […] I just noticed that lots of readers are visiting this old post about Maryland ranking second in the nation in food stamp fraud (in […]


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