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Oversight Examines USDA's Struggle to Police Merchants Engaging in Food Stamp Fraud

March 8, 2012

The House Committee on Oversight and Government Reform released "Food Stamp Fraud EXPOSED," a new video highlighting recent reports revealing hundreds of merchants previously disqualified from the U.S. Department of Agriculture's Supplemental Nutrition Assistance Program (SNAP) food stamp program continue to defraud the program. Food stamp fraud costs taxpayers hundreds of millions every year, according to a Scripps Howard News Service investigative report.

House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA), in a letter to U.S. Department of Agriculture (USDA) Under Secretary for Food, Nutrition and Consumer Services Kevin Concannon, asked USDA to respond to new findings by Scripps Howard News Service that found pervasive weaknesses in USDA’s process for disqualifying and reauthorizing merchants to accept food stamp benefits. The new revelations have led to an expansion of a previous February 6, 2012, request Issa made to Secretary of Agriculture Tom Vilsack about fraud within USDA’s food stamp program.

“With record numbers of Americans using food stamps, with an annual price tag of $75.3 billion, anything short of rigorous anti-fraud measures will be very costly to taxpayers,” wrote Issa in the letter to Concannon. “According to Scripps, a startling number of barred retailers ‘disobey the permanent prohibitions and continue to shortchange complicit customers and unwitting taxpayers.’ In fact, some retailers have been busted repeatedly – Scripps identified at least 137 merchants that have been disqualified more than once.”

Scripps Howard News Service reported over the weekend that out of 4,600 retailers who lost their authorization to accept food stamps between January 2006 and July 2011, 1,492 continue to participate in the program. Disqualified owners of stores removed from the program are supposed to face a lifetime ban. According to USDA, food-stamp trafficking by storeowners cost taxpayers $330 million in 2008 alone.

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