Report: Illegal Underground Food Stamp Market Thrives Online

Report: Illegal Underground Food Stamp Market Thrives Online

Do you need some food stamp credit cheap ?

Do you need cash for your EBT credit ?

Discounts are available at Backpage, Craigslist, and other website ads.

It looks like some needy people need cash not food.

Government enforcement is thin to say the least........

Understaffed food stamp fraud prevention units and lax anti-fraud security on Electronic Benefit Transfer (EBT) cards have created a thriving underground market where food stamp recipients illegally sell and trade their taxpayer-funded benefits, often using online websites like Backpage.com, Craigslist, or social media.

That is one of the findings of a new report by the Government Accountability Institute (GAI) examining how the poverty industry has become a massive profit center for politically-connected corporations like JP Morgan, who have made at least $560,492,596 since 2004 to process the EBT cards of food stamp recipients in 24 states and two U.S. territories.

But state and federal agencies—not EBT processors like JP Morgan—are in charge of policing food stamp fraud. That means JP Morgan doesn’t use the same kinds of anti-fraud security protections commonly found on credit cards in its administration of EBT benefits. Furthermore, EBT processors may charge a fee when food stamp recipients report a lost EBT card and need a replacement, when welfare recipients withdraw their cash benefits or make balance inquiries at out-of-network ATMs, and even on customer service calls.

Report: Illegal Underground Food Stamp Market Thrives Online

I always thought there must be people who do this. But now i know why. I wonder how long it will take for tougher security measures to be enforced, if any.

If Obama's the pres for the next four years, not a darn thing. I can't belive JP Morgan makes that much money processing the EBT cards. That in itself is a crime.

Nothing new about this. It has been going on for at least 20 years, its just now there is a more convenient way of locating buyer/sellers.

As a kid I would see this happen all the time.

Its terrible we have an economy that's been so ravaged by the leaking of jobs to other countries and destructive republican policies, that there are people selling food stamps as a means of getting by.

The misconception might be that these people have multiple cards or accounts. The sad truth is this is really people selling their only ebt benefit.

Good thing there is extremely harsh punishments for welfare fraud, at least in my state, and when caught, they are barred from using the system. This, like any program, has people abusing it. Find a charity without a little bit of waste, or downright fraud and manipulation, or a government agency for that matter. From the parks system, to medicare, etc.

I think its weird that SO much attention is always paid to food stamp fraud, and so little to the overall fraud happening on a systemic level on almost every plane of government. Isolating one department, or specific benefit and ignoring the others does nothing to fixing the overall problem of wasted american tax dollars.

The whole foodstamp system is so half a$$ed.

It's easy for anyone to get food stamps and what's worse is the amount they give you is astronomical.

For example: I had to go on food stamps temporarily because I was unemployed and literally had no money for food so I figured I would see what it took to get some and it was really easy. They allowed me the maximum which was $200 a month. For a single person that is a lot of money for food. Groceries for me were about $35 a week and sometimes less. This was buying all natural and some of it organic.

Now where it gets bad is if you have children, the government will also give you $200 PER PERSON. I don't know about you, but a 12 year old child is not going to eat nearly as much as a grown man in their 30's. Now Imagine a family of 5 not able to make ends meet. They would get $1000 worth of benefits. That to me is just absurd.

I remember growing up in Hawaii, my mom, dad and 2 brothers made up a house of 5 and our weekly grocery bill was about $150. I know because I always went shopping with my mom.

There needs to be way more strict guidelines when it comes to food stamps because they are giving out WAY TOO MUCH. They also need to restrict it to REAL FOOD and not allow sugar filled processed crap. Then again I guess the government could careless about the obesity rate in this country.

Although to stay on topic of this thread, I can for a fact say that the security of the EBT system is so flawed it's laughable. They do not track what you buy or where you buy it. There is no ID required upon purchase, I mean the card doesn't even have your name on it. It's just a card with some numbers and uses a pin.

Now I wasn't proud of having to go on food stamps, but I am not against it either. Some people actually do need it and it did help me from starving. I just feel that they need to really do something bout how much they issue, who they issue it to and I firmly believe that you should have to get a government issued food stamp photo ID to go along with a card issued with your name on it and that people should have to have their ID checked every time they purchase.

That would be the first step to slowly defeating the fraud on the front end. Now for the back end, I don't know.


Oh ya and I forgot to mention if you have children you also qualify for TANF (Temporary Assistance for Needy Families) which gives you cash benefits on top of your $200 food stamps per person. This cash is also not monitored like the food stamps are.

reply to post by xuenchen


Forget about Online.

I was at a Store, in the City, and had some guy offer me X amount in Food, for cash. He was willing to go into the store, and buy whatever I wanted, on his "card", at 2/5 the price.

I told him No.


Yeah, this is a problem. Online isn't even half the problem.

reply to post by jidnum

For a single person that is a lot of money for food.

I'm not sure where you live.. but

where I live in Oregon.. for a single teenager that's WAY under what is should be.. even shopping at WinCo~! I have quite a few friends on FS pgrm and it aint all that..

reply to post by Komodo


It's probably because they buy a bunch of already prepared food or frozen dinners. I live in Las Vegas and while food cost are pretty cheap, people still don't know how to shop. If you buy food to cook and prepare your self, then $200 is a lot of money.

I buy things to cook my self because when I compare prices to the already prepared versions i'm saving like 30%.

And I shop at Trader Joe's I also ate healthier than I ever had while on food stamps because I could actually afford the more expensive versions instead of the processed generic versions.

Also doesn't defeat the fact that you get the same amount of money per person whether you are 5 yrs old or 50 and a 5 yr old is not going to eat $200 worth of food in a month.

so what.

everybody picks on the least of us for alleged abuse.

income tax is mandatory, so its not "your" money.

second, why should henry kissinger and 4 star generals deserve every luxury imaginable with "your" money, but some down on their luck person has to have their life constantly monitored and the so called charity controlled to the last calorie.

so many millionaires and billionaires are enjoying the good life because of what the government is offering them and sleep well and guilt-free at night, but if someone takes every advantage of food stamps possible, he's a scum bag.

b.s. and hypocrisy.

its easy to be a millionaire if you have government contacts to get you access to federal funds.

haha, I've been watching people trade their food stamps for other things for yeeeaaaars. The bets one was 200 dollars worth of EBT for a tattoo.

reply to post by corruptpc


In my darker days, I had a friend who would trade his card to the dealer, who would give him half its worth in dope, then give the card back a few days later, only to do it again the next month. It seems like a good deal for the store or dealer in this case, but in reality it was not quite worth the hassle and we only got that deal cause we were steady customers who occasionally brought white girls by. lol... Only makes sense stores/ online would do it too, if they have a better system in place.

In the wild life reserves theres a sign posted please do not feed the animals they will become dependent....
I remember when you had to work for your government state benefits wash police cars sweep side walks.
In the great ripple of government control,they want use to be dependent..
Someone makeing $20.00 per hr has to buy everythang & heaven forbid dont get cancer your insurance that has the $20.00 copay wont cover your $100,000.00 dept to the Hospital now your broke & dependent on our government.....Keep us down they can make any rule they want ,we will work for food....

reply to post by xuenchen


your snip relates that:

...corporations like JP Morgan, who have made at least $560,492,596 since 2004 to process the EBT cards of food stamp recipients in 24 states and two U.S. territories.

i wonder who services the other 28 States and 3 territories ? Might that EBT processer be Bank of America ?

$56.5 Billion from 2004-2012 is costly but only 1/2 the total cost...as i point out above



this seems to only be the appetizer... we need the full scope of the problem/situation

Originally posted by jidnum
The whole foodstamp system is so half a$$ed.

They would get $1000 worth of benefits. That to me is just absurd.

Not true.

I have a family of 5 on foodstamps, and only get $450.00. My girls can sometimes out eat their dad. :/
Needless to say the foodstamps are usually gone half way through the month. I shop at walmart, since food is less expensive there than at the regular grocery store.

No, we do not get cash benefits. I like to know how to qualify for that. Even if one wasn't working, and the other on unemployment, we still didn't qualify. Medical for the girls only. They sometimes get transferred from welfare medical to our state's chip program. I love it when we are border line, and they get into a fight of who is suppose to cover them.

Now my husband just got a job. It pays about equal to or less than what he made on unemployment. The case worker told me that the foodstamps will go down even more. Great. I don't do the underground market thing. One, I don't know how. Two, we need to eat just as much as we need to try to pay the bills. I'm behind on just about everything right now. I guess that's life for now.

Same fraud just different techniques... So, the govt. has known this program is riddled with fraud and abuse yet they feel compelled to reward states that increase the numbers of people signing up for SNAP.

DOES NOT COMPUTE!! Unless the objective is to force a nation into govt. dependency.

Let's see what is really going on... PAY ATTENTION

This week, Congress is under pressure to pass the 2012 farm bill before the current legislation expires on September 30. About every five years, Congress pushes through a farm bill, ostensibly a big bundle of agriculture subsidies that also funds food stamps. But the name is misleading. Nearly 80 percent of the $1 trillion the 2012 bill would spend over the next 10 years would go to the food stamp program.

Welcome to Bizarro World

So, what’s going on? Although many people are poorer now than they were 10 years ago, the growth of the food stamp rolls can’t just be chalked up to an abysmal economy. Ten years ago, close to 12 percent of Americans lived below the official poverty line; in June, that number was 15 percent. While the share of the population in poverty increased only 25 percent, spending on food assistance grew 400 percent.

One constant: The food stamp participation rate exceeds the unemployment rate in 48 states.

The increase in food stamp enrollment comes after a decade during which federal guidelines for the program became ever more generous.

In 1996, welfare reform ended most legal immigrants’ eligibility for food stamps. The 2002 farm bill reversed that and created incentives for increased enrollment. The 2008 farm bill raised the minimum benefit and further expanded eligibility, allowing recipients to deduct the full cost of childcare from their incomes to qualify for benefits.

Obama has given this program an overdose of 5 hour energy drinks... This is USDA stimulus.. Remember that?

Under President Obama, this trend has accelerated. Between January 2009 and June 2012, America lost a net 1.3 million jobs and added 15.1 million people to the food stamp rolls. The 2009 stimulus bill raised maximum food stamp benefits 13.6 percent and suspended time limits for jobless adults without dependents. Indeed, the Department of Agriculture and Democrats often cite food stamps as a form of stimulus. “Everyone wins when eligible people take advantage of benefits to which they are entitled,” reads one USDA pamphlet.

BIG PROBLEM! States have no skin in the game and get rewarded for putting more people on the dole.

Alabama senator Jeff Sessions, ranking member of the Senate Budget Committee, says SNAP is structured so as to maximize enrollment: “Right now under the program, all the money comes from the federal government, and the states administer it. That means the states have no incentive to curtail fraud and abuse.”

On the contrary, states get bonuses for enrolling more people in SNAP, not for helping them get off. The federal government spends about $50 million a year rewarding states for increasing enrollment. The extra cash doesn’t have to be used for administering SNAP.

ENOUGH!! is Enough!! KILL the 2012 Farm Bill. It is not what you think it is. They missed the deadline in Sept to pass it and will try again in November.

www.weeklystandard.com...

Originally posted by randomname
so what.

everybody picks on the least of us for alleged abuse.

income tax is mandatory, so its not "your" money.

Yes it is our money, it is everyone's money.

second, why should henry kissinger and 4 star generals deserve every luxury imaginable with "your" money, but some down on their luck person has to have their life constantly monitored and the so called charity controlled to the last calorie.

They shouldn't. The public funds should be properly managed and fraud, waste, and abuse at all levels needs to be rooted out.

so many millionaires and billionaires are enjoying the good life because of what the government is offering them and sleep well and guilt-free at night, but if someone takes every advantage of food stamps possible, he's a scum bag.

If they are being given taxpayer funds they need to be cut off, but there are many pwople who are wealthy through hard work and innovationb.s. and hypocrisy.

its easy to be a millionaire if you have government contacts to get you access to federal funds.

No it isn't. The competition is fierce for contracting.

edit on 16-10-2012 by randomname because: (no reason given)

There is always a black market.

No amount of legislation or oversight or enforcement can do anything to stop the trade in a desired product.

The more people who desire the product the less enforcement can do.

If some nuts can swoop in with a helicopter and machineguns on a herd of elephants killing hundreds for their tusks and ships loaded with abducted humans can still make port in first world nations to be sold then of course some deadbeats can trade food stamps.

The number that is known or the people who are caught are just a fraction of the real occurrences.

Believing anything is accomplished by a single bust, a month long sting or a decades long "war" is foolish.

reply to post by Mystery_Lady


Im with you on this. Groceries are increasing in price. Its easy to talk down on people on food stamps when you arent suffering yourself, but just like your family my family is also hurting and behind on a lot of our bills. Its also going to get worse before it gets better.

reply to post by St Udio


Do you seriously think there are 52 states in the US?
Are you a US citizen?

Those are serious questions. I am not trying to be rude.

Check the flag out, it has 50 stars, one for each state. Not knowing how many states there are makes you look uneducated and people will not give your opinion any thought.