First, according to Hot Air which tipped us off to this news:

During President Obama’s first term in office, participation in the federal food stamp program increased from about 32 million Americans in 2009 to approximately 48 million by October of 2012 — an average growth rate of just over 11,000 recipients per day…..

And, now the Obama Agriculture Department is going to crack down (they say!) on the practice of swapping food stamps for cash—a practice I believe is behind the sharp rise in food stamp use (not that we have more hungry people)!

RRW readers know that Food Stamp Fraud has been a side interest of mine ever since I noticed a trend in who is actually committing the fraud—immigrant store owners and their customers.*  If you search RRW for ‘food stamp fraud’ you will very quickly see exactly who I mean (LOL! the ‘Mohammad’ coefficient is very high).

I believe there is an international understanding that all one needs to do is to get an “investor” visa, buy a cheap convenience store and set up the “trafficking” of SNAP (taxpayer) dollars from the patsies in the federal government to one’s wallet and to wallets across the world.

It works like this:  customer exchanges his benefit by receiving approximately 50 cents on every dollar exchanged.  The store owner then submits the charge for the full dollar to the government agency administering the program as if food has been purchased in that amount.   Some stores I’ve reported on have scammed the taxpayer to the tune of hundreds of thousands of dollars before being caught—prison terms are for less than 5 years generally (and although there may have been deportations, I don’t recall seeing one).

Here is The Hill yesterday (the last line is the best):

The Obama administration is taking additional steps to crack down on cash payments for food stamps.

The U.S. Department of Agriculture (USDA) on Thursday announced it would take action against the “bad actors” who abuse the program by extending the legal definition of “trafficking” to include indirect ways of receiving cash for Supplemental Nutrition Assistance Program (SNAP) benefits.

It is already illegal to sell SNAP benefits directly for cash, but the new rules would also bar cash refunds for products purchased with food stamps.

“Where there is a will to commit malfeasance, bad actors will try to find a way, and we must do everything we can to stay ahead of the curve,” said Agriculture Under Secretary Kevin Concannon. “Today’s announcement reaffirms USDA’s ongoing commitment to cracking down on abuse and protecting taxpayers’ investment in this critical nutrition lifeline.”

The USDA is also mulling a proposal to immediately freeze the payment of SNAP benefits to retailers “suspected of flagrant trafficking violations,” rather than waiting for an investigation to suspend the store’s ability to redeem the SNAP benefits. Comments are being accepted on the proposed rule.  [The investigations can take more than a year, as we saw in our local bust in 2008, so this is an important change.—ed]

Last year, the USDA permanently disqualified almost 1,400 retailers from participating in SNAP for exchanging cash for benefits or falsifying applications.

According to the most recent SNAP fraud report by the USDA, food stamp trafficking “diverted an estimated $330 million annually from SNAP benefits –— or about one cent of each SNAP dollar — between 2006 and 2008.”

Out of the nearly 240,000 stores active in the SNAP program, about 8.2 percent trafficked, according to the 2011 investigation.

Get that!  They disqualified 1,400 stores, but they estimate 8.2% are crooks!  If my math is correct 8.2% of 240,000 stores is 19,680 stores!  They have a long way to go!

*Note to “customers” who sell their stamps for cash, you are criminals and can be prosecuted too!

Update!  Here is a story from New Mexico with a greater variety of food stamp scamming techniques.  What does this tell you!

She said the biggest issue is people who sell their EBT card and report it lost or stolen. Out of the 138,927 cards issued to New Mexicans in 2012, more than 93,000 were replacement cards, Squier said. That’s about 70 percent.