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What is Food Stamp Fraud? - Investigation & Punishment

What is Food Stamp Fraud? - Investigation & Punishment
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  • 0:04 What Is Food Stamp Fraud?
  • 1:48 Food Stamp Fraud Investigation
  • 2:43 Punishment for Fraud
  • 3:25 Lesson Summary
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Instructor: Amanda Smith

Amanda has taught adult cognitive-behavioral programs in a corrections setting for the last ten years and has a bachelor's degree in Sociology/Criminology.

When food stamp benefits are used in the wrong way, fraud has been committed. This lesson will explore different types of food stamp fraud and explain how investigations take place and what types of punishment are common.

What Is Food Stamp Fraud?

When Sam is applying for food stamps, she claims her sister's two children as her own on her application even though they don't live in her house. She also doesn't claim her boyfriend's income on the application, but he lives with her and is responsible for bills in the home, like electricity and gas. This makes the amount of benefits that she receives go up because her application shows many dependents and low household income. Sam has just committed food stamp fraud.

Food stamp fraud is the abuse of a public assistance benefit given to individuals in need and can occur in a variety of ways. Individuals may commit food stamp fraud in the way that they obtain benefits or by the sale of food stamps, or stores may commit fraud by selling ineligible items.

Let's take a closer look at these scenarios. The first way that food stamp fraud can occur is through the application process to get approved for benefits. The amount a person can receive depends on family size and household income. By manipulating these numbers, a person can increase the amount of money that they receive.

Food stamp fraud can also be defined as the sale of food stamps for cash. This is illegal because the benefits are being used by someone that may not be qualified or approved to receive them. For example, Dave receives food stamps every month to help feed his family. However, this month Dave needs extra cash to repair his car. He sells his $150 food stamp allowance to a friend for $75 cash.

Another way that the food stamp system is defrauded is by a store selling ineligible items. When an individual receives food stamps, they are to be used for food items such as bread, milk, and meats. A store may allow someone to purchase cigarettes with their food stamp card by ringing them in as a food item instead.

Food Stamp Fraud Investigation

If food stamp fraud is reported or suspected, an investigation, or an examination of the facts surrounding the claim, will begin on the individual or the store. Investigations may take place at the federal level through the Department of Agriculture or through various agencies at the state level, such as the Department of Job and Family Services or Auditor's Office. Local law enforcement agencies may also take part in the investigation. The agency investigating the case must prove that the fraud was intentional. They may make unannounced visits to the home and compare the residents listed on the application with those actually found living in the home. An interview of family and neighbors may also take place to verify the reported information.

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