I-Team

BOSTON (WBZ) ― Some local grocery store clerks are making a profit on food stamps by giving cash for them and keeping a small fee in return, WBZ's I-Team learned during an undercover investigation.

"Just cash it in for cash. It's pretty simple," explained an unidentified informant for the I-Team.

It's a federal crime. With a swipe of a card that's only supposed to buy food, the I-Team's undercover informant gets cash. He's cashing in food stamps as part of our investigation showing how taxpayer dollars intended to help feed needy families are feeding the wallets of stores and feeding a fix of alcohol and drugs.

"It's almost like taxpayers are paying for your high," the informant said.

The I-Team and our informant hit mom and pop markets all across Boston with State Electronic Benefits cards, or EBT cards, in hand. We found store after store with people behind the counter more than willing to break the law.

The Columbia Road Market was open for business and ready to make a deal. The card is swiped; our informant puts in his PIN to cash $41.

He only gets $25 back because the woman he did business with keeps the rest -- 16 of taxpayers' dollars -- as a fee.

"The store makes out big time," the informant said. "Sometimes people go in with $300 and only get $150."

It's called food stamp trafficking. Each month people who qualify for food stamp benefits get money on a debit card. Traffickers find stores willing to cash those benefits in. Once they get the money on the card they don't need any receipts -- it's no questions asked.

The man in charge at the first market the I-Team visited denies that anyone in the store made the deal.

"It's not true," he said.

But the reality rolls on tape.

"Will you talk to us?" asked WBZ's Kathy Curran.

"Please leave," the man said.

"Do you want to go outside and talk?" Curran asked.

"About what?" the man said.

"About the fact that this store cashed in food stamps and took money," Curran said.
 
"It's not true," he said.

"I have the video to prove it," Curran said.

In the video tape, the I-Team's informant walks in and asks about cashing in food stamps. The clerk tells him to buy some baby formula with his EBT card at a store down the street.

He hands over the $28 container of Nestle Good Start, and the man behind the counter hands over $12 in cash.

At another store the clerk hands over another $20. Again, no food -- just cash.

Our investigation shows federal food dollars being wasted at a time when more and more families are struggling and don't have enough to eat.

"We're seeing the demand for food rise and those seeking food rise," said Catherine D'Amato with Greater Boston Food Bank. "Over 600 shelters, pantries and soup kitchens are seeing a significant increase between 30 and 50 percent."

The Food Stamp Program, which is now called the Supplemental Nutrition Action Plan, is administered by the USDA. On the State level it's run by The Department of Transitional Assistance, or DTA. Right now Massachusetts residents receive $52 million in food benefits a month. It's $2.9 billion a month nationwide.

"With the economy not doing great right now we're seeing more and more coming forward looking for assistance," said Phuoc Cao, director of the state's Food Stamp Program. "Program integrity is one of the high priorities of the USDA and DTA."

"Are there any specifics you can talk about that are being done to make this more secure?" Curran asked Cao.

"I would want to refer that to the USDA," he said.

The USDA's Northeast Region Headquarters is at the Tip O'Neill building in Boston. The I-Team asked to speak with the regional administrator, Bob Canavan, about the food stamp program and our investigation but our request was denied.

We received an email from a press person in Washington saying the integrity of the program is a high priority, but it wasn't enough of a priority for anyone to speak on camera.

According to the most recent USDA report, each year an estimated $241 million in food stamp benefits are illegally cashed in even though the number of cases have significantly decreased. But our investigation shows it wasn't tough to find here.

We spoke to local, state and federal investigators who handle food stamp fraud cases. They said they'll look into what we found in our investigation.

We asked the USDA if there's anything being done beyond prosecution to make the program more secure. They said the agency monitors transactions to identify suspicious activity at stores. In fact, over the past three years, 37 stores in Massachusetts have been permanently banned from the Food Stamp Program.

The majority of food stamp trafficking happens in small, privately owned stores.

To report any food stamp related fraud, contact the following agencies:

 Massachusetts Department of Transitional Assistance - 1-800-FRAUDXX

 USDA Office of the Inspector General - 1-800-424-9121.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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