Meadville Tribune

State News

March 8, 2014

SUNDAY ISSUE: Stamping out food stamp fraud

HARRISBURG — People who receive assistance commonly referred to as food stamps in Pennsylvania spend $1 of every $20 in benefits at convenience stores, yet federal data show corner stores represent a disproportionate share of fraud cases.

The discrepancy reflects differences in the management of mom-and-pop stores and larger groceries, say activists, and also highlights an area of criticism of the government program.

The recent federal Farm Bill, which cut Supplemental Nutrition Assistance Program (food stamp) funding for 175,000 Pennsylvanians, included $5 million per year in new spending to help the U.S. Department of Agriculture clamp down on illegal food stamp trafficking.

The program’s critics in Congress — including U.S. Rep. Tom Marino, R-Lycoming County — say more should be done.

Marino tried unsuccessfully to amend the Farm Bill to force the government to maintain an online, searchable database of food stamp spending. Department of Agriculture officials say they are now barred from releasing data on food stamp spending at specific stores. Nor do they provide data on what types of products are purchased with food stamps.

The program, Marino said, “is a perfect example of how our government spends too much money with too little oversight and accountability. Even though Congress established parameters for the program and designated what foods are eligible, Congress has virtually no information to ensure that the program is operating effectively.”

About 1.8 million Pennsylvanians are enrolled in the Supplemental Nutrition Assistance Program (SNAP), according to the state Department of Public Welfare, which administers it. Those beneficiaries last year used $141.5 million worth of food stamps at convenience stores — about 5 percent of all food stamps spent in the state.

But, according to the Department of Agriculture, convenience stores represent nearly all of those merchants busted for fraud in Pennsylvania during 2012 and most of 2013. The USDA yanked food stamp privileges for 241 stores in the state during that period. About 10,000 stores in the state accept food stamps.

A store might lose its food stamp privileges for serious violations, according to the USDA, such as accepting food stamps for ineligible items, submitting false information to the Department of Agriculture or trafficking food stamps, which typically involves corrupt employees who pays cash for food stamps in an amount far less than their face value.

While the Department of Agriculture investigates misconduct by businesses that accept food stamps, state officials target fraud on the individual level, said James Timko, spokesman for the state inspector general.

The state usually acts against 20 people per month for food stamp trafficking, he said. About one-fifth of those cases lead to criminal charges, while most others involve administrative sanctions such as a loss of food stamp benefits for one year, two years, or upon a third offense, for a lifetime.

Albert Zawalish, who runs Rose’s Market, a small neighborhood grocery in Johnstown, said it’s more common to hear about problems with stores that sell inappropriate items for food stamps — such as cigarettes — than those that participate in outright trafficking.

People interested in skirting the law “will test you,” Zawalish said, but long-established businesses like his family’s market, where he has worked for more than 50 years, are unlikely to risk trouble.

Other store owners desperate to make a buck to stay in business may be more prone to take the risk, he said.

Zawalish said most people who use food stamps in his family’s store are customers he’s known for years. “We know what they can buy with food stamps, and they know,” he said.

Occasionally, an unfamiliar face comes into the store and tries to use food stamps for cigarettes. Zawalish said he doesn’t know if those people are government agents trying to conduct a sting.

Otherwise, he said, the USDA does not require small stores to account for what products they sell under the program.

Laura Tobin Goddard, executive director of the Pennsylvania Hunger Action Center, said independently run corner stores are probably more prone to fraud than larger groceries because fewer people are involved in transactions. Larger stores and chains have more internal oversight, she said, and more at stake if they lose the ability to take food stamps.

David McCorkle, president of the Pennsylvania Food Marketers Association, said the trade group supports efforts to root out fraud.

“The reputation of the food industry and for each of our members requires that associates are fully trained to follow the letter of the law when customers utilize their benefit privilege,” McCorkle said.

Anti-hunger activists say the state’s 4,500 convenience stores may redeem a fairly small portion of food stamps, but they are an important outlet for those enrolled in the program.

People living in inner-city neighborhoods or the country may not have easy access to supermarkets, said Julie Zaebst, policy director for the Coalition Against Hunger.

“It’s true, many convenience stores have a long way to go in terms of providing healthier, affordable foods for residents in their communities,” Zaebst said, “but for many low-income people in Pennsylvania, these stores are the only option they have for buying the food they need.”

John Finnerty reports from the CNHI Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by Community Newspaper Holdings Inc. Email him at jfinnerty@cnhi.com and follow him on Twitter @cnhipa.

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