Madison – State caseworkers have shut down 1,200 Milwaukee County Jail inmates who were improperly participating in the state’s public food assistance program and are finding more fraud among the thousands of other recipients who report routinely losing their benefit cards.
The Journal Sentinel has reported this year on fraud in the state’s $1 billion a year FoodShare program, noting how some participants report their cards as lost a dozen times a year and others illegally buy and sell cards on Facebook.
Since the newspaper’s investigation, state officials have looked at some participants who say they lose their cards almost every month and found dozens of cases of fraud, overpayments and suspicious activity, according to data released under an open records request.
Gov. Scott Walker’s administration gradually has been ramping up checks for fraud this year. Since June, for instance, the state also has closed more than 1,200 FoodShare cases of inmates locked up by the Milwaukee County Sheriff’s Department who didn’t qualify for the program.
“Avoidance of fraud is what we’re after. We want to stop it on the front end,” said Kitty Rhoades, deputy health services secretary. “We want to put the systems in place at the gate.”
But the data released on the cases of fraud shows that the agency doesn’t yet have a full handle on potential problems in the program. FoodShare, which is meant to help low-income people pay for part of their groceries, is administered by the state and counties but is almost entirely federally funded.
On Aug. 18, three employees of the Milwaukee County Department of Health and Human Services and two other people were charged with defrauding FoodShare out of more than $350,000.
The three employees are suspected of issuing fraudulent Quest benefit cards in a scam that stretched from 2008 to 2011, according to the criminal complaints. A preliminary hearing in the case is scheduled for Tuesday.
In April, the Journal Sentinel reported that last year nearly 2,000 FoodShare recipients reported losing their Quest cards – similar to debit cards and used by participants to purchase food – six or more times. That’s a concern because professional fraud investigators say it can signal that a recipient is selling his or her card and its benefits for cash and then requesting a replacement card.
As a result of the newspaper’s reporting, the state looked at some of the lost card cases that it directly handles – those in Milwaukee County and those involving childless adults.
State officials examined 132 of the cases where recipients had reported losing their cards more than 10 times in a year, focusing on some of the most serious cases among the much larger number reported on by the newspaper. They found:
32 cases of confirmed or suspected fraud and other intentional rule-breaking. Individuals can be suspended or kicked off the program for such violations, which the state also can turn over to law enforcement and federal authorities.
19 cases of participants receiving overpayments, including eight cases where recipients were improperly getting benefits in two or more states. Those cases were not judged to be fraud.
In all, there was rule-breaking, suspected fraud or overpayments in 39% of the cases examined. Most of those problems hadn’t been previously identified before the newspaper’s investigation, state officials said.
The explanations for the other cases of lost cards included recipients with mental disabilities and homeless and transient recipients who lose Quest cards and then have their replacement cards mailed to an old address and then returned to the state unopened.
The federal government requires state and county officials to replace lost cards promptly.
Limited efforts
The state isn’t sure whether the similar lost card cases in the other 71 Wisconsin counties outside of Milwaukee are being examined by officials in those counties. The state so far hasn’t systemically examined the cases under its responsibility where people reported their cards lost 10 times or fewer.
In the cases that were examined, state Department of Health Services spokeswoman Stephanie Smiley said that the review looked at computer data for suspicious activity and other problems.
Smiley said some of the recipients were contacted but couldn’t say how many had received a phone call and how many had received a visit to their home by authorities – one step that fraud investigators say can be crucial to turning up problems.
Kevin Moore, executive assistant at the Department of Health Services, said the agency is investing more money into once-neglected fraud detection but still must limit its efforts because of the state budget troubles. In the cases of suspected fraud, letters are being sent to recipients warning them that selling benefits is illegal, he said.
Jon Peacock, research director for the Wisconsin Council on Children and Families, said the findings didn’t change his opinion that there was relatively little fraud in the FoodShare program, which has some 389,000 cards issued to individuals and families statewide. Peacock was cautiously positive about checking cases of fraud, emphasizing it should be done without affecting needy participants.
“I’m all for ferreting out fraud in programs, especially when it can be done without collateral damage,” Peacock said.
Quest cards replaced food stamps, which were easily defrauded because the government had little control over them once they were issued. Quest card users must use a PIN to ensure the authorized recipient is using it. Once a card is reported lost or stolen, officials cut off access to that account.
Scammers will sell a card and PIN for cash to someone with the understanding that they will not report it stolen immediately, letting the buyer use it before a new one is issued.
A recipient who reports a lost or stolen card doesn’t get the money that was spent on the card but gets the next month’s benefits as usual.
Inmate fraud
As part of other efforts, state officials are also working with the Milwaukee County sheriff’s office to match names of FoodShare participants against those of jail inmates. Normally inmates can’t receive the benefits, although those with work-release privileges or with less than a month behind bars are allowed to keep them.
Since June, the state has shut down 1,238 cases in which inmates were improperly receiving benefits. That doesn’t even include cases where a family had the monthly amount lowered to reflect the fact that they had been mistakenly getting benefits for one family member who is now eating his meals behind bars.
“Oh, my gosh!” Rep. Samantha Kerkman (R-Powers Lake) said on learning about the inmates. “If we can work together and change the system, the money we’ll save.”
Kerkman, co-chairwoman of the Legislature’s Joint Audit Committee, said she’ll make sure a large-scale audit she helped approve for the FoodShare program will also look at the issues of lost cards and jail inmates.
The state and sheriff’s office, which didn’t respond to a request for comment, worked together and found 82 inmates whose benefits were being fraudulently spent even though they were behind bars. The state is working to recover that money.
In August, the state started sending out information to other counties explaining how they could run similar checks. But the state still hasn’t perfected such checks with its own prison inmates.
In March, a Legislative Audit Bureau report found 33 prison inmates improperly receiving FoodShare benefits or incorrectly adding to their family’s monthly payment. It was the second time the audit bureau had found inmates receiving benefits.
After the report, state health services officials began work on checking inmates’ names against recipients, but Smiley said the state was still trying to overcome computer problems.
Article source: http://www.jsonline.com/news/statepolitics/130511318.html
View full post on National Cyber Security
