At a time when more people than ever depend on food stamps to put a meal on the table, food stamp fraud by local retailers is going largely unchecked because limited resources and the lack of a state law have made it hard for local authorities to investigate and prosecute unscrupulous merchants.
Although selling food stamps, known as trafficking, is a federal offense, neither Massachusetts nor New Hampshire have specific laws allowing local authorities to investigate and prosecute retailers who traffic in food stamps. That loophole has made it difficult for local authorities to clamp down on retail traffickers, stores willing to pay recipients half the face value for every dollar they exchange.
"If unscrupulous vendors are taking advantage of low-income people, there needs to be a law to prosecute these store owners," Massachusetts state Sen. James B. Eldridge, D-Acton, said. But he said in order to craft such legislation, officials first need a better understanding of how widespread trafficking and fraud is among merchants.
That may be difficult to ascertain.
Since local authorities don't investigate or prosecute retail food stamp trafficking or fraud crimes, state officials have no figures on how widespread the problem is.
And while federal officials digitally track food stamp redemptions by stores, few trafficking cases are ever federally prosecuted. Merchants found to have committed fraud are often suspended briefly from the Supplemental Nutrition Assistance Program, as food stamps are now known. But many are often back redeeming the benefits within a year.
In New Hampshire, of the 883 stores that take food stamp cards, only 18 were disqualified from the program since 2006. The story was similar in Massachusetts, where just 228 of the 4,320 stores authorized to accept food stamps were disqualified. By 2009, 90 of those Massachusetts retailers were back on the list of authorized food stamp merchants and had collectively racked up more than $7 million in food stamp redemptions in that one year alone, records obtained from the U.S. Department of Agriculture, which oversees the $50 billion program, show.