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Funds Awarded to Combat Food Stamp Fraud

Kentucky is one of seven states selected to share $5 million in U.S. Department of Agriculture (USDA) grant funds to identify, track and prevent the misuse of Supplemental Nutrition Assistance Program (SNAP) benefits by program recipients. Kentucky will receive more than $1.1 million in federal grant dollars, which will be used to help combat SNAP trafficking, primarily the exchange of benefits for cash or other goods or services.

In Kentucky, the grant will be administered by the Cabinet for Health and Family Services (CHFS) Department for Community Based Services and the Office of the Inspector General. The cabinet will coordinate its fraud prevention and detection efforts with local, state and federal law enforcement partners, while also training retailers to better identify potential SNAP traffickers.

“Many Kentucky families would go hungry without the aid of SNAP. It is a critical safety net that allows a family to eat when their income won’t cover the rent and groceries,” said CHFS Secretary Audrey Tayse Haynes. “Unfortunately, there is a small percentage who abuse SNAP benefits for financial gain, diverting benefits from those truly in need. This grant will help bolster our efforts to find those who exploit SNAP and hold them accountable.”

The SNAP Recipient Trafficking Prevention Grant Program was designed to improve outcomes in the prevention, detection and prosecution of recipient trafficking. Recipients found guilty of trafficking are subject to severe penalties, including permanent disqualification from the program and criminal prosecution. USDA intends to review the results of these projects to determine the most effective strategies and then share those best practices with state agencies, nationwide.

SNAP helps feed millions of American families experiencing hardship. Nearly half of SNAP participants are children, and 42 percent of recipients live in households in which at least one adult is working but still cannot afford to put food on the table. For many, SNAP benefits provide temporary assistance, with the average new applicant remaining on the program 10 months. In Kentucky, about 390,000 households receive SNAP benefits each month. 

The vast majority of SNAP recipients and retailers abide by the rules.  Since the early 1990s, the USDA and its partners reduced trafficking from 4 percent to approximately 1.3 percent.  USDA investigates fraud among retailers, and works with states to pursue recipient fraud. In efforts to identify and reduce fraud among retailers who accept SNAP benefits, USDA took the following actions through the third quarter fiscal year 2014:

  • Imposed sanctions, through fines or temporary disqualifications, on 518 stores found violating program rules; and
  • Disqualified permanently 1,084 stores for trafficking SNAP benefits (i.e. illegally exchanging SNAP benefits for cash) or falsifying an application.

For more information about USDA efforts to combat fraud in nutrition assistance programs, visit the FNS program integrity website. To make a report of SNAP trafficking or fraud in Kentucky please contact the OIG Hotline at (800) 372-2970.

From the Cabinet for Health & Family Services