Food Stamps Denied in Fraud Crackdown

As part of an effort to crack down on fraudulent claims, federal officials said Wednesday they have denied 4,334 applications for emergency food stamps by residents in the Los Angeles area during the last week.

Crowds of more than 1,000 earthquake victims continued this week to line up at Dodger Stadium and three other large processing centers to obtain coupons that can be redeemed for food at grocery stores, Department of Agriculture officials said.

Last weekend, authorities arrested five people on charges of buying and reselling food stamps outside a South-Central Los Angeles check-cashing store. More arrests are expected as a task force of 29 undercover investigators fans out across Southern California streets in search of fraudulent transactions.

“I think when you have so many hundreds of thousands of people who have stood on lines and are so desperate, we are going to have many of those desperate people acting out street crimes the same way they would in any instance,” said Ellen Haas, assistant secretary for food and consumer services.

Haas testified Wednesday, at a Senate Agriculture Committee hearing on fraud and abuse in nutrition assistance programs, that illegal food stamp trafficking exceeded $1 billion last year. In some cases, she said, coupons were exchanged for guns and drugs.

The federal government began distributing emergency food stamps Jan. 24. So far, 117,419 earthquake victims have received $35.7 million in vouchers, in addition to the more than $60 million in food stamps issued each month in Los Angeles County.

The daily number of rejected applications has increased from 30 on Jan. 24 to 1,212 Tuesday as federal officials employed various tactics to crack down on fraud in Los Angeles. These include warning applicants through flyers and loudspeaker announcements that food stamp fraud is punishable by fines up to $250,000, reducing the number of application sites from 29 to 16 and instituting a three-day waiting period before providing benefits.

“We are doing so much aggressively to prevent (fraud),” Haas said. “A lot of fraud isn’t just street trafficking; a lot of people are double-dipping.”

Once applications are received, inspectors use a state computer system to check for repeat applications and use information from various sources to verify statements.

Nationwide, food stamp fraud often takes place at some of the 207,000 retail stores authorized to accept the vouchers. Last year, Department of Agriculture officials reported finding violations in 2,147 stores. In Illinois, authorities indicted 19 individuals and 12 corporations on fraud and money laundering charges.

“The integrity of the food stamp program is at stake,” Sen. Richard G. Lugar (R-Ind.) told Agriculture Department officials at Wednesday’s hearing. “The amount of press attention emphasizing fraud is devastating.”