Michigan reimbursed $119k in alleged food stamp fraud over 6 months



(The Center Square) – Michigan has reimbursed $119,000 worth of food stamps reported stolen from March through August 2023.

The food stamp program is a federal program operated by state health departments serving as a social safety net. Criminals steal food stamps via credit card skimmers, compromised logins and stolen identities sold on the dark web.

The victims report skimming from their Food Assistance Program’s electronic benefit transfer account to the state and request a replacement card. Food stamps reimbursements ranged from $12,050 in July to $30,850 in March, according to documents obtained through records requests from the Michigan Department of Health and Human Services.

The state can refuse to approve reimbursements based on the skimming occurrence

A dashboard shows reported stolen benefits from The Supplemental Nutrition Assistance Program from 10 states.

The United States Department of Agriculture reported replacing $5.7 million in benefits this fiscal year across 10 states impacting 10,499 households.

The metrics reflect the 10 states reporting stolen benefits to Food and Nutrition Services. The data only includes stolen benefits reimbursed using federal funds and no state-funded reimbursements.

Over seven months in 2022, The Center Square reported that ranged from $4,400 in December to $35,760 in September for a total of $131k.

The state health department plans to fight SNAP fraud by blocking common PINS, restricting card functionality in high-fraud areas, and giving more access to a fraud interface system.

Haywood Talcove, the CEO of LexisNexis Risk Solutions’ Government Group, which provides fraud prevention tools to 26 state unemployment programs and the 50 top US banks, estimates that criminals steal $3 billion monthly from the SNAP program.

“The fraud goes beyond just the $119k that has been reimbursed,” Talcove wrote in an email. “It also includes cards that have been trafficked by people selling them for 50 cents on the dollar and the use of stolen and synthetic identities to steal benefits from American Taxpayers.”

Talcove said that Deputy Under Secretary for USDA’s Food, Nutrition, and Consumer Services Stacy Dean needs to enact chip-enabled cards immediately, boost program integrity, simplify the eligibility determination process, and remove barriers that prevent information sharing so tools can target suspicious transactions such as EBT cards buying cases of Red Bull.

“We estimate around $3 [billion] in being lost each month to criminal schemes within the SNAP program – we also need to acknowledge that pay and chase does not work and we need to prevent the dollars from going out to these criminal groups who are using the money to traffic fentanyl, terrorism and human trafficking,” Talcove wrote.

This year, Rep. Kathy Schmaltz, R-Jackson, introduced House Resolution 127 urging the USDA to switch to chip-enabled cards.

“Struggling families carry the burden of SNAP fraud, often going weeks without the benefits stolen from them,” Schmaltz said in a statement. “By failing to update its technology, the USDA creates more work for both the victims and law enforcement who spend time and resources investigating the fraud.”



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