Maryland, Virginia at top of nation for food stamp fraud

For every $100 in benefits, Maryland gave out $6.11 to people who weren’t eligible — amounting to about $60 million — ranking it second in the United States for losses from improper payments, according to fiscal 2010 data from the U.S. Department of Agriculture. Virginia gave out $5.04 to ineligible recipients, and the District ranked 21st, doling out $3.76 in overpayments. The national average was $3.05 for every $100 spent on food stamps.

But investigators in the two states and the District are examining a shrinking percentage of food stamp recipients for potential fraud — and very few offenders are prosecuted — even as government spending on the welfare program soars to record highs.

Analysts say fraud is increasingly going undetected, as most states have fewer resources to devote to the oversight of food stamps for more than 45 million Americans.

“Food stamps have always been one of the welfare programs that is more prone to abuse,” said Michael Tanner, a senior fellow with the Cato Institute, who focuses on social welfare policy. “I think the largest reason you’re not seeing more investigations is the bang for the buck — you’re dealing with smaller dollars per person — but that’s not to say these small things don’t add up eventually.”

Improper food stamp payments are costing the United States roughly $2.5 billion this year as federal spending on the benefits reaches a record $64.7 billion, according to the Department of Agriculture.

Enrollment in the food stamp programs, which help needy families pay for groceries, more than doubled in Maryland and grew 70 percent in Virginia between fiscal 2007 and 2011. Maryland distributed nearly $1 billion in benefits to 645,349 food stamp recipients in fiscal 2011, while Virginia doled out roughly $1.3 billion in benefits to 841,299 recipients, according to state data.

During the same period, the percentage of food stamp recipients who were investigated for fraud fell by 48 percent and 32 percent in Maryland and Virginia, respectively.

And only a tiny fraction were prosecuted.

In Maryland, seven recipients were prosecuted last year while another 113 cases, which involved smaller infractions, were settled outside the courts. Of the nearly 1,300 Maryland cases that were investigated, 25 percent contained evidence of fraud and another 17 percent revealed overpayments, according to information from the Maryland Department of Human Resources. In the District, just five cases were criminally prosecuted last fiscal year.

Some receiving the food aid said they preferred that investigators crack down harder on those committing fraud.

“That really ticks me off,” said Yvonne Johnson, a single mother from Laurel who relies on food stamps to augment her job waiting tables. “You should see the looks I get at the grocery store — there’s still a stigma. Those people breaking the rules make us all look bad.”

Incidences of fraud were slightly lower in Virginia, where the state government delegates investigatory responsibilities to its 120 local social services offices.

The offices identified fraud in 16 percent of the 9,639 total cases they investigated in fiscal 2011, according to the Virginia Department of Social Services. Roughly 3 percent of those cases, or 339, were criminally prosecuted, while the rest were dealt with outside the courts.

A common way that people bilk the system is by lying about their eligibility, such as income levels, on their welfare applications, according to Terry P. Scates, assistant inspector general for Maryland’s Department of Human Resources. Recipients also might fail to notify the Social Security Administration when their income or number of dependents changes.

“Nothing really stops anyone from lying,” Scates said. “Ideally, case workers can identify [misinformation] during the eligibility process. But in this day and time, unfortunately, you have a lot of folks that are computer savvy and they can create the right documentation to back up their claims.”

But it’s getting more difficult for the cash-strapped states to investigate as budgets are slashed.

Maryland has 14 investigators — or less than one per county — to investigate food stamp fraud as well as impropriety in every other welfare program Social Security offers, Scates said.

The state had twice as many investigators five years ago, but state budget cuts prompted staff reductions, he said.

Instead, he added, Maryland relies primarily on tips from the community to determine which cases to investigate.

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