LAS VEGAS (KTNV) — Each year, billions of our federal tax dollars go to Electronic Benefit Transfer--or food stamp cards.
The EBT cards are often a lifeline for low-income families who can't afford groceries.
About one in every seven Nevadans counts on that system to put food on their table.
But it's a system that's ripe for fraud.
Thieves are getting savvier when it comes to stealing food from the mouths of those in need.
We spoke to one expert who's done the numbers, finding food stamp fraud across the country is skyrocketing but the government is ill equipped to track, investigate and prevent it.
The pandemic brought a multi-billion-dollar boost to the Supplemental Nutrition Assistance Program--or SNAP.
"When you have a program that's gone from $80 billion to $147 billion, it attracts criminals," said Haywood Talcove, CEO of LexisNexis Risk Solutions Government Group.
Since March 2020, SNAP participants have gotten an extra monthly payment.
After March 14 of this year, the second payments will stop, but fraud against the program likely won't.
"Over the last six months at LexisNexis, we've seen an alarming attack on the food stamp program," Talcove said.
"I estimate over the next 12 months, this is going to be approximately a $20 billion national problem. In Nevada alone, I think it's going to be over $1 billion. And what's happening is, it's accelerating rapidly."
To understand the impact, we need to put a face on the victims of fraud.
Elisabeth Cervantes was struggling to feed three little faces when she was caught in a fraud scheme several years ago.
"I was in a really bad situation at the time and so, every amount of money that went towards my kids... I needed it at that time. I was at one of my lowest points. I'm in a better place now. But I really did need it."
Cervantes fought for and won custody of her children and left Las Vegas for California.
"And they notified me that they couldn't give me my child support--and I believe it was about two months' worth of child support that they couldn't give to me--because it was paid to the state of Nevada because I was supposedly on benefits. And I was like, I don't live there. I'm not on benefits there."
Court records show a Nevada state employee had stolen her identity.
In Sept. 2019, Yazzmine Cato was convicted on two felony counts of stealing nearly $15,000 in food stamp benefits while she worked in the Nevada Division of Welfare and Supportive Services.
"They already know you're at the lowest of lows and so, to take from you is like, let me just kick you while you're down," said Cervantes.
According to the Nevada Attorney General's office, Cato used her position in the welfare office to fraudulently open and approve Temporary Assistance for Needy Families and SNAP accounts so she could personally collect the benefits.
Elisabeth Cervantes lost out on $4,000 in support as a result.
"I had to use other resources to make up for the money that I didn't get," Cervantes said, wiping away tears.
She was forced to accept help and maxed out her credit cards.
To this day, she's still working to pay off that debt.
"When they find out it's fraud, don't leave the victims punished because that's what I felt. I felt that I was a victim and I also paid for the consequences."
Talcove says Cervantes' case shows how simple it is to scam the government.
"What happened during the pandemic was a seismic shift in benefit fraud in government programs. The criminals learned that government was really easy to steal from because they don't have technology. They don't use chip-enabled cards, they don't check identity, you can bundle as many cards as you want and they're not going to get caught!"
Card skimmers used to be the main trick of the trade but now, a new trend is emerging with EBT cards that haven't even been activated.
"Regular people, people that need that benefit, people that are hungry, that depend on it, are going and using their card and they're finding out there's no money," said Talcove.
He says fraudsters are able to steal the benefits based on information they get from beneficiaries themselves.
"And it may even happen to you. You may get a call and it says that your card has been frozen, please press 1, enter in your card number, enter in your PIN, and what they're doing is, it's just a massive phishing attack."
If you get a call from someone claiming to be from the USDA, Talcove says hang up!
"Do not respond to that automated message. I guarantee you, it's a criminal. I guarantee you they're not located in Nevada. They're likely located in Russia. They're likely located in China, Romania or Nigeria. It's a fraud scheme!"
He shared screenshots scraped from the dark web where fraudsters sell the Nevada food stamp accounts they've stolen.
"After this story airs, you're going to get thousands of people saying that happened to me!"
We reached out to the state and federal agencies who administer the SNAP program.
The Nevada welfare division's chief of investigations and recovery sent the following statement:
"The Division of Welfare and Supportive Services currently has a contract worth about $840,000 with a vendor whose product helps us monitor and detect fraud.
"The Division of Welfare and Supportive Services employs 18 dedicated fraud investigators with 4 supervisory investigators and looking to hire 5 more. The Division also works closely with State and local law enforcement to detect, investigate, and prosecute welfare fraud.
"In the last few months, the Division of Welfare and Supportive Services has seen an increase in clients’ EBT benefits being stolen. It is believed that the stolen benefits are a result of the EBT card being skimmed in Nevada and the card cloned to be used in another state. In response to the increase, the Division of Welfare and Supportive Services is developing a state plan with guidance from USDA Food and Nutrition Services to address the reimbursement of stolen benefits, attempting to validate the claim of stolen benefits and tips to minimize or prevent stolen benefits.
"The Division recommends and encourages those with EBT benefits to utilize the resources of the EBT Edge app to protect your benefits by freezing/locking your card when not in use and blocking internet and/or out of state transactions. In addition, the use of third-party apps is not recommended. Some additional recommendations include regularly monitoring EBT usage and check transaction receipts to monitor the EBT card balance. If you are a victim of stolen benefits, report the stolen benefits to the Division of Welfare and Supportive Services, immediately obtain a new EBT card and PIN number and file a police report with local law enforcement. The Division of Welfare and Supportive Services will work with law enforcement upon their request to assist with an investigation."
USDA sent the following statement:
"USDA has received numerous reports of SNAP fraud in which thieves use 'card skimming' or 'card cloning' to steal SNAP benefits. Card skimming can happen to anyone that uses a magnetic stripe to make a purchase with their credit, debit, or EBT card, including SNAP participants.
"As such, Congress recently passed a law that will ensure SNAP participants who are victims of card skimming or cloning have their benefits, replaced. The law requires states to replace skimmed benefits stolen between October 1, 2022, and September 30, 2024.
"Moreover, the law requires certain security enhancements to prevent fraud such as requiring Food and Nutrition Service (FNS) to issue ongoing guidance on fraud prevention and detection; requiring FNS to promulgate regulations to require states to implement card security updates and fraud prevention and detection measures; and requiring FNS to coordinate with the Administration for Children and Families, the Department of Justice, states, retailers and EBT processors to determine how benefits are being stolen and how they are redeemed – and then establish measures to prevent benefit theft.
"For more information about our commitment to protecting SNAP customers from fraud, please visit our website."
