On Your Side Investigators Find More EBT Fraud & Abuse

(Memphis) EBT cards are designed to help families in need.

They contain SNAP benefits, commonly referred to as food stamps, as well as cash benefits from a program called Temporary Assistance for Needy Families.

However, the On Your Side Investigators found purchases on those cards that are far from necessity, even after lawmakers demanded reform.

We tracked your tax dollars and the state’s progress in preventing EBT fraud.

Booze, smokes, Beale Street? You may not think it’s where your money should be spent when someone else is using it, but it is.

“That’s just wrong,” says Bonnie Wilcox.

It’s also illegal in some cases.

The On Your Side Investigators tracked more than a year’s worth of purchases on EBT cards across Tennessee.

We specifically looked at cash purchases and withdrawals using money from the TANF program, cash benefits that go to families in need.

WREG examined millions of transactions, worth more than $130 million from April 2012 through June 2013.

We also combed through pages detailing how Shelby County residents spent money out of state, from Wasilla, Alaska to Gulf Shores, Alabama.

When we showed taxpayers what we found, we got these responses.

“I don’t think it’s right,” says Memphis resident Lester Thomas.

“I’m blown away,” says Teresa Crandell. “I was actually shocked, I had no idea that they were able to do that.”

Two laws passed in the spring of 2013 make it illegal for Tennessee residents to use EBT cards at places like casinos, strip clubs and liquor stores.

Public Chapter 312 

Public Chapter 402

However, the On Your Side Investigators found plenty of abuse, before and after reform.

Like in late 2012, there was a purchase from Lou’s Liquor in Memphis for $772! We saw another for $740 at Highway 51 Liquor.

Then a month after those bills became law, WREG spotted one for $373 at Lou’s.

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Month after month, WREG found swipes at mostly the same liquor stores in Shelby County.

In fact, throughout the 15 months we looked at, there were more than $180,000 worth of purchases, and purchases with cash back from liquor stores alone across the state.

One of the places we found hundreds of transactions for Shelby County residents was right across the state line in Tunica, Miss., at places like the Hollywood, Goldstrike and Fitz casinos.

Someone swiped an EBT card for $192 at a Goldstrike ATM, $103 at Fitz’ 711 Lucky Lane.

There were more than $1,500 worth of withdrawals at Hollywood.

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“The EBT cards should go to help the family not to go gamble,” added Thomas.

Senator Jim Tracy of Shelbyville carried the two bills that addressed EBT fraud.

WREG showed him the spreadsheets we developed with the EBT transactions.

While looking at the pages he said, “Two-hundred, $162, holy cow! There’s your liquor store owners right there too, unbelievable.”

Although both became law in 2013, the Department of Human Services has until July 1 to implement changes.

Tracy told WREG, “The Department is already working on that, notifying businesses that it will go into play and the businesses will be penalized if they allow people to do it.”

Businesses can be fined a thousand bucks for the first penalty and $5,000 for a third.

Cardholders have to pay back fraudulently used money and could be suspended from the program for too many violations.

“They have the ability to identify and watch when those cards are swiped and if they are swiped in a place that is illegal,” added Senator Tracy.

A DHS spokesperson told WREG the Department’s Inspector General couldn’t fit an on camera interview into her schedule during the time requested to explain.

She says DHS has a unit that monitors transactions, looking for patterns and potential fraud, and they’re currently researching ways to literally block fraudulent transactions at the point of sale.

She told WREG that DHS has already notified businesses, EBT recipients, and recently held rule making hearings across the state.

We checked and some liquor store owners already have posters up, and other stores that also accept EBT have gotten letters from DHS.

“I think this will help cut down on the fraud of the EBT card,” says Senator Tracy.

In addition to flat out fraudulent purchases, we also found some that seemed fairly questionable.

For example, there were hundreds of dollars worth of cash purchases with cash back at gas stations next to the casinos, the same at tobacco shops, as well as ATM withdrawals on Beale Street.

To report EBT fraud, call 1-800-241-2629.



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