Food Stamp Fraud Is a Crime, But Not in the Way You Might Think

Here’s how to keep a stereotype alive: take one fallacy propagated about an entire group, typically rooted in some phobic, racist, classist, or misogynistic point of view. Support it with details from isolated instances that make for easy, illustrative counterpoints. Frequently use generalizing phrases and terms that demean, diminish, or vilify said population with homogeneity. This is how narratives about the laziness and impropriety of people who receive food stamps and cash benefits continue to dominate the politics of public assistance. Although Medicaid is powered by state and federal funding, the Supplemental Nutrition Assistance Program (SNAP) — the authorizing entity for food stamps — and its cash counterpart, Temporary Assistance for Needy Families (TANF), are federally funded and funneled through state offices. In Washington, DC, where five service centers distribute benefits that help more than 114,000 residents in a population of just over 700,000, two recent but separate scams masterminded by former employees of the Department of Human Services (DHS) have reinvigorated the cyclical debate about welfare reform. In February, Gary T. Holliday, who’d been a policy analyst with DHS for 13 years, pleaded guilty to embezzling more than $400,000 from SNAP between June 2017 and November 2018. A month later, former social services representative Demetrius McMillan admitted to using his interactions with customers and access to internal payment systems to fleece DHS of $1.4 million in just three months. Facilitating more than 700 fraudulent underpayments — an average of $1,757 from SNAP and $1,986 from cash benefits — McMillan took a $1,000 cut from each transaction, as well as other kickbacks he commanded from people he’d recruited into the scheme. He also used his low-level authority to solicit sex in exchange for benefits. Of the 305 assistance-eligible people who received bogus payments between April and July 2018, 296 were women. The future of welfare is almost always a contentious subject, and when fraud is involved, the factual points in the discussion are too often eclipsed by opinion. Holliday and McMillan are scheduled to be sentenced in June, but the prosecutors’ office hasn’t been clear about its intention to pursue charges against accomplices who knowingly participated in the embezzlement of one or both public assistance programs. While participation in these schemes is a crime, we can only assume that, because they legitimately qualified for SNAP and TANF, they are poor. And the pressures of poverty can make a law-abiding citizen more malleable for coercion and corruption. Instead of throwing a spotlight on the isolated cases of deception, the bigger question is: why are people who are receiving assistance still enduring and experiencing circumstances that keep them entrenched in the desperation that catalyzes crime? Securing life's basic necessities is a regular challenge for the categorically poor, particularly in major US cities where the cost of living is infamously high and rapid gentrification escalates already exorbitant rent. According to a 2018 study, the average cost of rent in Washington, DC is about $2,500 for a two-bedroom apartment. While that might be a high-end estimate in what realtors call “desirable” neighborhoods, it’s not atypical for renters in low-income communities to forfeit $1,500, $1,800, sometimes nearly $2,000 a month for living space. That means upwards of 50 percent of many residents’ monthly income is going to housing alone, a huge chunk of budget that doesn’t leave much for the financial demands of childcare, transportation, healthcare, sometimes essential utilities. Even when residents have championed the gauntlet of evidentiary paperwork to qualify for housing vouchers and public assistance programs, there’s a gap between application and the actual dispensing of benefits. Last year, SNAP recipient Shonice Garnett — another Black woman to the rescue — led the filing of a class-action lawsuit against DHS Director Laura Zeilinger, claiming that the agency was not meeting mandated timelines or generating timely notifications for food stamp recertifications. In May, a US district judge ruled that DHS failed to process less than 95 percent of initial applications and 59 percent of recertifications for food stamps in a reasonable amount of time. That means roughly 2,000 to 4,000 households have not been receiving benefits on time every year. In a transparent example of how devastating that delay can be, one plaintiff said spending money on food caused her to fall behind on rent and her electricity bill. Essentially, it becomes a battle between necessities, particularly considering that minimum wage is $13.25 an hour (albeit scheduled to increase to $15 an hour in July 2020) and low-income, mostly Black residents are voluminously displaced in what’s been called “the highest intensity of gentrification of any US city.” The stressors of poverty and overwhelming need in a city that is methodically pricing out the poor have become a legal formula to criminalize the vulnerable whenever, wherever, however possible. That’s not exclusive to DC; it’s true in other cities, as well. Violations happen on both sides, by retailers who accept, then misuse SNAP benefits and by eligible individuals who try to sell them for cash, usually at deep discounts for their in-store value. In 2018, a multicultural collective of 20 men and women were arrested in Rhode Island for illegally obtaining $14,000 worth of food stamps and public services. In 2016, 14 people in Baltimore were charged with running a food stamp trafficking ring worth $16 million. Last year in Jacksonville, a sting operation disrupted a $4 million food stamp fraud operation that involved 198 people. Most of them were facing at least one felony charge that will cement their future as a marked criminal. On average, beneficiary fraud doesn’t happen as often as public assistance’s revisionist opponents claim it does. A 2017 report released by the US Department of Agriculture found just a 1.5 percent rate of food stamp misuse. When it does happen on the individual level, the proceeds often cover an unpaid balance to keep lights, gas, or water from being cut off. When you consider that a single parent in DC raising two children can bring home no more than $1,675 in monthly income to qualify for $511 to feed three people, it’s clear that men and women, moms and dads, grandparents and caretakers have to negotiate their financial priorities constantly. Because more people qualify for food stamps than cash benefits, they can be a bargaining chip when a dire money need crops up. And for poor people, they crop up often.


About the Author

Janelle Harris is a senior writer for The North Star. Her work has appeared in many outlets including Essence and Ebony. She has a master's degree in African American Studies from Temple University and writes on various topics, including social justice, activism, and culture.