, Gloucester, MA

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July 31, 2013

State signs deal with feds to probe EBT fraud

BOSTON — Under a new agreement with the United States Agriculture Department, state and local law enforcement in Massachusetts will be able to investigate retailers engaged in so-called food stamp trafficking, an area that previously fell under federal purview.

“The federal government looks at retailer fraud and the state government looks at consumer fraud,” USDA Northeast Regional Administrator James Arena-DeRosa said Monday.

The agreement DeRosa signed with state’s Department of Transitional Assistance commissioner, Stacey Monahan, will allow the state to collaborate on investigations and gain access to federal database analysis that highlights suspicious transactions.

The DTA administers the federal Supplemental Nutritional Assistance Program through electronic benefit transfer — or EBT — cards. Monahan was brought in on the heels of Daniel Hurley, who resigned after reports detailing failures in the agency’s controls.

“After years of chronic underinvestment, when we saw the doubling of the SNAP caseload, which means about 900 cases per frontline worker in Massachusetts, Massachusetts is finally making investments in systems and infrastructure and playing for the long-term, but real change takes time,” said DeRosa. “Like most of us, lending a temporary helping hand to those in need is an American tradition that goes back to the founding of the Commonwealth and John Winthrop, but there is no place and should be no tolerance for fraud and abuse.”

Four municipalities in Massachusetts have already signed sub-agreements with USDA to conduct local investigations. They are Everett, Taunton, Attleboro and Pittsfield. The agreement with the USDA is part of the 100-day plan Monahan initiated when she took the office earlier this year.

The USDA reviews 2.5 million transactions per day, and has similar “state law enforcement bureau,” or SLEB, agreements with about 30 states, 14 of which are active, DeRosa said. In some cases, generally “smaller” stores will purchase SNAP benefits from someone at a 50 percent discount, a crime that the collaboration aims to investigate. The federal collaboration will also allow for more “rigorous oversight” of the stores that participate in SNAP and will loop in local police to ongoing investigations.

“We basically become a force multiplier,” Everett Police Chief Steven Mazzie, president of the Major City Chiefs, told reporters.

In 2012, $1.3 billion in food stamp transactions were conducted in Massachusetts. That year, 237 stores were disqualified from the program for “trafficking,” including 22 in Massachusetts. An additional 107 stores sanctioned or fined.

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