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In the last two years, nearly 51,000 electronic food stamp cards were reported stolen or lost in the Miami Valley area, reflecting a larger statewide trend of Ohio annually replacing more than 200,000 cards to recipients.
Authorities said the extent of food stamp abuse and the financial impact in Ohio is unknown because the activity often goes undetected. But they fear the behavior is widespread, and say that many cards are being trafficked or misused, resulting in the waste of taxpayer dollars.
One of the 26,224 electronic food stamp cards reported lost or stolen in the Miami Valley area last year belonged to Timothy Slusher’s sister. Slusher, 31, of Dayton, told the Dayton Daily News he illegally sold his sister’s Electronic Benefit Transfer card, or food stamp card, to a small store in exchange for $120 in cash — a common method used to defraud the assistance program.
The state replaced 485,880 food stamp cards that were reported stolen or lost in 2009 and 2010, according to the Ohio Department of Job and Family Services. Of these, about 50,950 belonged to residents in Butler, Greene, Miami, Montgomery and Warren counties.
Ohio had 2.07 million active food stamp accounts in the last two years, including 211,275 in the five-county region. This translates into the state replacing one-quarter of EBT cards given to recipients.
“Fraud is there and we have to figure out ways to stop it,” said U.S. Rep. Jean Schmidt, R-Loveland, who is chairwoman of the House Agriculture Subcommittee on Nutrition and Horticulture, which has jurisdiction over the food stamp program. “The unfortunate thing is, this program is supposed to help people in need, but abuses are occurring.”
Food stamp usage and fraud
The average monthly participation in the food stamp program grew 44 percent in Ohio last year to 1.66 million from 1.15 million in 2008, according to Job and Family Services. State officials attributed the increase to the recession and high levels of unemployment.
From January to April of this year, Ohio paid out about $986 million in food stamp reimbursements to grocery stores and other businesses that sell food products, according to the state. On average, about 113,300 residents in Butler, Greene, Miami, Montgomery and Warren counties received food stamp assistance each month in 2010.
A Dayton Daily News analysis of police reports, court documents and investigative records found that not all of the benefits paid by the program are going to stocking the shelves of needy families with groceries.
Some people illegally trade the benefits at grocery and convenience stores in exchange for cash, with clerks charging a fee. Some store owners and clerks will pay 50 cents for every dollar of food benefits they can deduct from the food cards.
Drug users also trade their cards for illicit substances or for money to support their habits.
In May, state and federal authorities executed search warrants on four businesses in Dayton that they allege trafficked in food stamps. In February, West Carrollton Councilwoman Jody Jones resigned from office after she and her ex-husband, Edward Claude Jones, were implicated in a scheme to traffic in food stamp cards.
Benjamin Mills, the birth father of Baby Vanessa, was sentenced last week to a year in state prison for welfare crimes that included wrongly receiving food stamps.
Proof of fraud tricky
Timothy Slusher said he pleaded guilty last month to a felony charge of illegal use of food stamp benefits after he sold his sister’s food stamp card to a clerk at a market in Trotwood.
Slusher, who knew his sister’s card PIN, said many people he knows receive food stamp assistance, and they all trade some of the benefits on their cards in exchange for cash.
“Everyone I know who gets food stamps sell some for extra cash because they ain’t got no work and they ain’t got no money,” he said. “It is quick and easy, and everybody is doing it.”
Slusher said he can barely walk down the street in his neighborhood without someone offering to sell him their card or someone else’s. Most sellers, he said, want cash to buy cigarettes, alcohol and gas, and they will trade their benefits to other people in the neighborhood or at small grocery stores in the area.
“Most people are hard up,” he said. “I didn’t think it was that big of a deal. ... So many people were doing it, and I was doing what I thought was OK.”
Dayton police Lt. Brian Johns, commander with the narcotics division, said police officers do not receive many complaints of food stamp crimes because there are rarely witnesses who would be in a position to report the activity. “Either the person that has the card is getting monetary return for the card, or the store is making a profit on it,” he said. “Usually there is not a lot of third-party involvement who would call the police — it happens, but I wouldn’t say a lot.”
Even when police discover drug addicts and other criminal suspects have EBT cards that do not belong to them, Johns said it can be difficult to prove they obtained them illegally.
Many of the people who trade or sell EBT card benefits retain their cards, but some surrender their cards during the illegal transactions and report them stolen or lost at a later time, authorities said.
Last year, the state replaced 20,260 cards that were reported lost and 5,960 reported stolen in Butler, Greene, Miami, Montgomery and Warren counties, according to Job and Family Services.
In the region, there were 111,700 active EBT accounts last year, and about 75,650 people on average each month received food stamp benefits. Most accounts provide benefits to multiple family members, and people on average receive food benefits for about eight months, according to the U.S. Department of Agriculture.
Less trafficking now
Benjamin Johnson, spokesman for the Ohio Department of Job and Family Services, said he cannot say whether the 485,880 food stamp cards reported lost or stolen in Ohio in the last two years represent a particularly significant number because he has no reference point.
“I don’t think anybody would tell you that nearly 500,000 of anything is a small number, but it is a system that is handling 1.8 million people,” Johnson said. “I have no frame of reference with regular debit cards: How many regular debit cards are reported lost and stolen to Chase and Huntington in any given month or year?”
Johnson said it is likely some cards are inadvertently taken by criminals who stole a wallet, and the card just happened to be inside. He said also some people undoubtedly report EBT cards stolen when they were merely misplaced.
Jean Daniel, a spokeswoman for USDA, said food stamp trafficking is at the lowest levels in the history of the federal program. She said the electronic cards and other technology have greatly cut down on fraud, because it is easier to track reimbursement payments and usage.
Trafficking cost the federal program about $330 million annually across the country from 2008 to 2006, or about 1 cent of every dollar of benefits, according to the agency. In 1998, the program lost an estimated $811 million to trafficking.
“We are certainly trying to get it even lower than that,” Daniel said.
Schmidt said her subcommittee plans to hold hearings when they work on a farm bill next year to identify the scope of the problem and how fraud takes place. After gathering input from stakeholders, Schmidt said her committee will be in a better position to figure out ways to improve the system to safeguard against abuse.
“We know some stores are involved in this,” she said. “We also recognize the majority of stores that are handling these cards are honest, hardworking people. The delicate balance is: How do you punish the bad without hurting the good?”
Contact this reporter at (937) 225-0749 or cfrolik@DaytonDailyNews.com.
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