New agreement gives state power to investigate food stamp fraud by retailers

State and federal officials today signed an agreement empowering Massachusetts authorities to investigate retailers who may be engaging in food stamp-related fraud.

Because the Supplemental Nutrition Assistance Program (SNAP) is a federal one, national authorities usually investigate retailer fraud while leaving consumer fraud investigations up to the states.

But under the agreement signed today, state agencies can now go after stores that accept food stamps in exchange for lesser amounts of cash, pocking the difference.

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Department of Transitional Assistance Commissioner Stacey Monahan called it “a first-of-its-kind agreement in Massachusetts” and said it “will allow the department to collaboratively investigate potential SNAP trafficking and allow law enforcement to prosecute those who are making money by defrauding the system.”

Massachusetts becomes the 15th state to have an active agreement of this type with the Department of Agriculture.

Monahan and the regional administrator of the US Department of Agriculture’s Food and Nutrition Service, James Arena-DeRosa, signed the agreement in a ceremony at the Tip O’Neill federal building in Boston this afternoon.

Arena-DeRosa described what retailer fraud might look like: a consumer gives a cashier $100 worth of food benefits, gets $50 in cash, but no food, and the store pockets $100 worth of reimbursement from the program without having given up any inventory.

John Polanowicz, the state’s secretary of Health and Human Services, said the agreement would give the state “new tools for investigating those involved with fraud and SNAP benefits trafficking.”

Four Bay State cities—Everett, Taunton, Attleboro and Pittsfield—have also signed sub-agreements that will simultaneously authorize them to investigate nutritional assistance benefit fraud from retailers in their cities. More municipalities may join.

“We basically become a force multiplier for the state and federal government,” explained Everett Police Chief Steven A. Mazzie at the signing ceremony. He said local investigations into food stamp fraud could involve “an undercover-type role.”

Under the agreement, before state or local authorities can begin an investigation into potential retailer nutritional assistance fraud, the federal government must give approval.

After reports of fraudulent use of state welfare benefits, the Legislature has recently been working to tighten public assistance programs in the Commonwealth. Electronic Benefit Transfer (EBT) cards, which have been the subject of recent controversy, can include both state and federal welfare benefits.

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