The nation's health-care fraud networks earned splashy headlines last week with the simultaneous arrests of more than 100 suspects in seven cities -- including Miami and Tampa. The operation, involving numerous federal, state and local agencies, took aim at an estimated $450 million in bogus Medicare billings. That figure only represents a fraction of the estimated annual cost of such fraud to U.S. taxpayers, somewhere between $60 billion and $90 billion.
This week's arrest of some 45 suspects in food-stamp fraud by the Manatee County Sheriff's Office in conjunction with Bradenton police and federal and state authorities places the spotlight on another massive drain on taxpayer money -- and a gaping hole in the law.
Across the country, the food stamp program costs $72 billion annually, with a $450 million monthly price tag in Florida. Nationwide, the number of low-income households receiving assistance to purchase food soared to a record level last year -- almost 45 million people. In Florida alone, 3 million residents receive food stamps, a whopping 17 percent of the population.
Last year, the Florida Department of Children and Families, which administers the food stamp program, reported more than 40,000 possible cases of fraud to the state's Division of Public Assistance Fraud. DCF implemented tougher measures to thwart applicants from perpetrating scams last year, recording the country's best record with less than 1 percent of food assistance going to fraudulent recipients.
But there's another form of fraud just as virulent. States monitor applicants while federal authorities investigate retailers. According to the Government Accountability Office, retailers are responsible for billions in food stamp fraud. In one case alone last year, the three owners of a Bradenton convenience store were indicted by a grand jury on food stamp fraud and wire fraud, accused of bilking the federal government out of $857,000 by exchanging cash for food stamp benefits over 20 months.
This week's Manatee County arrests evolved out of a four-month sting operation in which an undercover agent posing as a homeless person offered to exchange a $300 food stamp debit card for cash or drugs. About half the suspects arrested agreed to trade cocaine, oxycodone or marijuana for the debit card and pin number. The others -- small grocery store and convenience owners among them -- paid half the card amount, $150, in cash.
Since the food stamp program switched from paper to electronic debit cards, authorities were able to trace the cards. Merchants purchased goods at bulk-buy stores to sell in their businesses.
Current law does not require any purchaser identification in order to redeem a card, an oversight that should be corrected. With a debit card's pin number identifying the food stamp recipient, retailers would be able to halt fraud that involves the sale of the card by refusing to accept it as payment from unauthorized people. Another potential remedy is to place the recipient's photograph on the debit card, as many banks do now.
Manatee County Sheriff Brad Steube noted that his office rarely participates in this type of sting because of an already tough workload. But the savings in taxpayer money are well worth the effort, he stated at a press conference. Commendably, Steube is also willing to take part in a sting with undercover agents posing as debit card buyers, thereby ridding the system of welfare recipients out to game the system. These kinds of operations should be pursued -- similar to the way federal, state and local authorities are joining forces to crack down on health-care fraud.