Breaking Tampa Bay, Florida and national news and weather from Tampa Bay Online and The Tampa Tribune | TBO.com
Saturday, Apr 19, 2014
Local News

Florida a 'model' for rooting out food stamp fraud

The Tampa Tribune
Published:   |   Updated: March 21, 2013 at 04:47 AM
TAMPA -

The scheme was simple:

Customers with food stamps came to Majdi Juma's Bradenton convenience store on the pretense of shopping. But instead of getting food, they got cash by using their benefits cards to make fake purchases. Juma gave them back half the value of the fake purchase, according to federal court records.

Over about 20 months, Juma and two other men at his store scammed the food stamp program out of more than $857,000.

Last month, the men pleaded guilty to fraud and trafficking in food stamps and were ordered to repay the amount they scammed, give up $364,000 in cash and a Cadillac Escalade. They were also sentenced to between two and three years in prison.

As the number of Floridians on food stamps has exploded – to more than 500,000 last year in the Tampa Bay region alone -- state and federal officials have stepped up their efforts to weed out scam artists. Still, the perception of abuse remains, especially when food stamp users buy junk food or luxury items with their benefits.

Six months ago, the state Department of Children & Families made fraud-prevention a higher priority, creating the Public Benefit Integrity Administration with the aim of heading off potential scammers at the agency's front door.

"Previously, program integrity was a function that occurred after a person was granted and issued benefits," said Matthew Dempsey, who runs the new agency.

The priority was getting a client into the system, Dempsey said. After that, workers would determine if the client actually qualified for benefits.

In the weeks or months it took to verify someone's identity – or to discover they were using fake papers – scammers could collect hundreds or thousands of dollars in benefits. DCF officials called the approach a "pay and chase" system.

In 2006, 8.5 percent of Florida's food-stamp benefits were issued incorrectly, giving the state the nation's third-worst track record for accurate payments.

Since then, state officials have left behind "pay and chase." They've centralized and computerized food stamp applications, putting the emphasis on catching potential rip-off artists before they get a dime of taxpayers' money.

The result is a system that short-circuits scams, such as applying for benefits in county after county until one says "yes" or claiming different living arrangements in different places – with a spouse in one county, without a spouse in another – until an application hits pay dirt.

Now, once someone is in the system, their records are available electronically anywhere in the state.

The new system checks a potential food-stamp client's identification against multiple databases, providing nearly instant background checks. Fraud that used to take weeks or months to root out now takes hours or days.

As a result, Florida now has the nation's best record for awarding food-stamp benefits to those who need them. Last year, less than 1 percent of benefits went to the wrong people.

Florida has become a model for food stamp accuracy.

"Every state in the country has been to Florida to see how we've been handling food stamps," said DCF spokeswoman Erin Gillespie.

DCF estimates the front-loaded antifraud system saved taxpayers $35 million last year. The state collected another $32.7 million in fraudulent payouts.

At a ceremony Wednesday in Orlando, the U.S. Department of Agriculture gave the DCF a $6 million bonus for its work to prevent food-stamp fraud. The Legislature will decide how to spend that money, Gillespie said.

While state officials fight food-stamp fraud among applicants, federal officials police the retailers.

The USDA has increased the fines for exchanging food stamps for cash, like Juma did. It has also stepped up monitoring of food-stamp use at small stores, where trafficking most frequently occurs.

Those stores are often in urban or rural communities with few other grocery options: so-called "food deserts." The USDA has tried to reach people in food deserts by expanding the ranks of stores that can accept food stamps.

Ironically, that decision has opened the system up to more potential fraud by retailers, said Kay Brown, who tracks the food-stamp system at the Government Accountability Office.

In recent years, food stamp fraud by retailers cost U.S. taxpayers $2.2 billion, according to the GAO.

The switch from paper food stamp coupons to an electronic debit card has helped pinpoint retailers defrauding the food-stamp system, Brown said.

"There used to be middlemen on the streets that collected food stamps," Brown said. "You can't have middlemen with debit cards."

Computer systems tied to the debit cards comb through sales records looking for outsized sales volumes or other markers of fraud, she said.

But even that's not foolproof, as the Juma case shows, she said.

"People who want to abuse the system will find a way. It's a challenge to stay ahead of them."

The USDA asked state officials this month to start going after individuals who visit stores such as Juma's intending to rip off the food stamp system, said USDA spokesman Aaron Lavallee.

"There are often two sides to this equation," he said.

Despite state and federal efforts to curtail abuse, food stamp recipients continue to draw jaundiced looks.

"It's nothing for people to come through the line with a cart full of chips and soda," said Fred Heichelbech, a 78-year-old retiree who works as a bagger at a Zephyrhills grocery store. "If it was nutritious food, I wouldn't have a problem."

Heichelbech said he has watched people buy crab legs and birthday cakes with their food stamps. He resents what he sees as a misuse of money taken from his pocket.

"If I have to work at 78 years old, these other people could, too," he said.

But the federal rules that govern food stamps put few limits on what people can buy with them. Hot meals, alcohol and tobacco products are out, but most other food qualifies – even if it's crab legs, the DCF's Dempsey said.

"We might not agree, but that doesn't mean it's erroneous," Dempsey said. "It means people need to write Congress."


kwiatrowski@tampatrib.com (813) 259-7871 Twitter: TBOKevinW

Comments