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Desperate Times: Selling Food Stamps To Get By

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By Chris Levister –

Last week, a woman sat outside the Food for Less supermarket in San Bernardino attempting to receive cash for her federally assisted food supplements known as food stamps.

The US Department of Agriculture says this is an increasingly familiar sight outside many grocery and convenience stores in low income communities.

With high unemployment appearing to be a permanent part of the economic picture, the longterm poor are turning to increasingly desperate measures to survive.

Many are selling food stamps for cash. Over 6 million people today report food stamps as their only source of income according to an analysis of government data collected by the New York Times.

Here’s how the illegal transactions work: People sell food stamp funds in front of stores, and offer to go into the store and buy groceries for an incoming customer.

Once purchased, the Electronic Benefits Transaction (EBT) beneficiaries sell the groceries to the customer for cash. Food stamp benefits can only be redeemed for food or seeds.

People pushing EBT benefits are willing to accept as low as halfprice for goods, said Chantal Goodwin who works at a hair salon across the street from the Food for Less.

“These are desperate times. You got people out here on the street everyday selling food stamps, DVDs, jewelry, purses anything to help them pay the bills,” said Goodwin. The sad thing is they’re not buying drugs and guns, they’re using the cash to pay utilities, rent and other bills.”

In the past, traffickers that received food stamp benefits physically sold their paper stamps for a discounted amount of cash. Unfortunately for police, the switch to the EBT debit card hasn’t stopped welfare fraud.

While food stamp trafficking has been a problem for years, with the recession black market sales are on the rise according to the Office of Inspector General (OIG) which investigates criminal violations of the Food Stamp Act.

Paul Feeney, general counsel for the Office of the Inspector General (OIG), says the OIG does plenty of investigating into EBT fraud. Food stamp benefits account for more than $40 billion of the annual federal budget, according to the OIG’s semiannual report to Congress.

In 2009, the OIG testified before the House of Representatives, and called for greater controls over the regulation and distribution of subsidized food benefits.

Unlawful possession or use of food stamp benefits in an amount of $100 or more is a felony; less than $100 is a misdemeanor.

Catching and prosecuting— EBT trafficking can be extremely difficul t for store employees. Cashiers, police, security detail and others have to actually see the transaction take place between the two parties to officially report abuse to the Department of Agriculture.

“Most trafficking occurs between three and six o’clock, a store’s busy hours, because that is when there is the most traffic outside of the store,” Goodwin said.

In 2004, all 50 states phased out physical food stamps and switched to EBT debit cards to increase efficiency and effectiveness of program operations for both administrators and recipients.

The US Department of Agriculture has defined trafficking as "the buying or selling" of food stamps "for cash or consideration other than eligible food."

OIG is asking for the public’s help in reporting food stamp abusers.

If you suspect that someone is trafficking his/her Food Stamps, you may use the OIG Fraud Complaint Form at www.usda.gov, or call the USDA FRAUD HOTLINE at 1-800-332-6347

People receiving food assistance through the Supplemental Nutritional Assistance Program (SNAP), formerly the Food Stamp Program, receive a set amount of benefits every month.

In order to receive food stamps, a person or family must be below the poverty threshold defined by the U.S. Census Bureau. The poverty threshold for an unmarried person with no children is $10,301, while a four-person family must make less than $22,207 per year in order to receive food stamp benefits.

In a recent study by Colorlines magazine "Selling Food Stamps for Kids Shoes," author Seth Wessler says selling food stamps is a growing survival mechanism, and one in which the already poor are being short changed.

Across the country, the problem of long-term poverty and unemployment is growing. The New York Times reports, "6.3 million Americans have been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s."

Large numbers of the unemployed are not receiving any benefits, a growing source of public anger. "On average, only two-thirds of unemployed people received state-provided unemployment checks last year, according to the Labor Department. The rest exhausted their benefits, fell short of requirements or did not apply."

Due to welfare reform earlier in the decade, many do not qualify for already restrictive support.

When Congress overhauled welfare in 1996, it created the Temporary Aid to Needy Families (TANF) program that placed time limits on aid and made cash assistance contingent on finding a job.

Nationwide the number of families on TANF dropped from 4.8 million before welfare overhaul to about 1.7 million families in 2008.

Most people who left the rolls were pushed into insecure and lowwage work. At the time in 1996, there was no national debate about what would happen to families if an economic crisis struck.

Now, with a national recession that many analysts recognize as a depression in poor communities of color, even those low-wage jobs are few and far between, and the crisis that's hit middle-class Americans hard has left families teetering one small step away from a tumble to homelessness and despair.

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