The state of Ohio on Tuesday announced it has partnered with the U.S. Department of Agriculture to use technology to crack down on fraud in the federal food stamp program, which costs U.S. taxpayers hundreds of millions of dollars each year.
Under a new agreement, Ohio will try to identify fraud among recipients of food stamp benefits by sharing information about their transactions with USDA.
USDA said it will provide training and data-mining assistance to identify suspicious patterns of benefit redemption that could indicate illegal activities, such as using benefits far from home or at stores in high-risk areas.
“These data mining partnerships … will give the states and the federal government both the opportunity to share these electronic data systems, and we think we can help each other in that regard,” said Kevin Concannon, USDA undersecretary for food, nutrition and consumer services. “It’s one thing to take the stores or the store owners out of the program, but there have to be consequences too for the individual households that may have trafficked benefits in those stores.”
USDA is in charge of investigating food stamp fraud perpetrated by retailers and vendors. The state and county agencies are in charge of investigating fraud among residents who receive food benefits.
A common form of fraud involves people illegally selling or trading their benefit cards to friends, store clerks, drug dealers or others for cash, drugs or other non-food items. Buyers usually pay 50 cents for every $1 in benefits.
Fraudulent activities are a drain on taxpayers. USDA estimates that about 1 percent of food stamp benefits are misappropriated because of trafficking. The program distributed $74.6 billion in fiscal year 2012, meaning about $746 million was lost to fraud.
USDA said it discovers most food stamp trafficking activities using its electronic data-mining monitoring system. State officials hope they will be able to root out fraud among recipients by analyzing redemption behaviors.
The new partnership is part of an ongoing effort by the state and federal government to uncover and stop misconduct involving the nutrition program, officials said.
Last May, USDA announced it was giving states the ability to contact households that requested multiple replacement benefit cards to determine whether the requests were legitimate or suspicious and required more probing.
The Dayton Daily News in June 2011 reported that the state replaced about 485,880 electronic food-stamp cards that benefit recipients reported missing in 2009 and 2010. Police officials said some of those cards were certainly lost to fraud.
The newspaper investigation prompted Ohio Auditor Dave Yost to evaluate the program, and his office similarly found that Ohio reissued about 340,000 food stamp cards in fiscal year 2011, and more than 17,000 benefit recipients were reissued 10 or more electronic cards since March 2006.
This story is part of the Dayton Daily News ongoing coverage of exposing fraud within the federal food stamp program.