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It's simple to scam the food stamp program in Minnesota: Sell a benefit card for cash, walk into a county social services office, report the card lost or stolen, and get a new one on the spot.
The state issues so many replacements -- ranking fourth in the nation for the number of food benefit recipients requesting at least four new cards in a year -- that the federal government sent a letter to the Minnesota Department of Human Services this spring highlighting the high numbers as a sign of possible illegal behavior.
Minnesota is moving to address the problem. By September, the state will ship food benefit cards by mail -- rather than providing them over the counter -- and those cards will include the recipient's name. The state also supports the U.S. Department of Agriculture's proposal to allow states to more closely monitor recipients who ask for an excessive number of replacement cards, known as EBT cards.
"One of the reasons we rank high is that in our state we've made it very easy to get replacement cards," said Jerry Kerber, inspector general for the Department of Human Services.
But, he said, even with the changes, "there is still a very strong directive to replace the card ... the interest is in making sure that individuals get the cards when they need them."
Fraud in the Supplemental Nutrition Assistance Program, commonly known as food stamps, costs the federal government an estimated $750 million a year, or 1 percent of the program's budget.
Minnesota provides food stamps for 535,520 low-income residents. And though just under 3 percent have sought four or more new cards in the past year, the federal government considers any level above 2 percent significant.
Minnesota is one of at least 10 states that primarily provide new cards over the counter, while at least 29 primarily send them in the mail. Other states use some combination of the two. Replacement cards in Minnesota maintain the level of benefits that existed at the time they were reported lost or stolen.
In a letter to Minnesota officials in April, the U.S. Department of Agriculture described North Carolina as a model in curbing replacement card abuse. That state, which has the fourth lowest percentage of food stamp beneficiaries seeking excessive replacement cards, sends out a letter to repeat requesters that advises them that their transactions will be closely monitored, details examples of food stamp abuse and warns that a fraud investigation will be undertaken if the number of cards ordered continues to increase.
Overall, Minnesota's Department of Human Services (DHS) issued 126,094 new cards in 2011, but has not kept detailed statistics on how many cards a person requests.
One of the agency's first realizations when learning about its federal ranking "was that this is not information that we readily even have available," said Kerber.
The agency is working with the vendor that processes the state's food stamp transactions to expand the number and type of reports available, especially reports that would show the number of cards issued to the same person during a particular period.
Starting in September, food benefit cards will feature the recipient's name, following 2011 legislation that aimed to reduce misuse of the program. The change has been delayed by three months because Minnesota's vendor could not meet the original June deadline.
And if the proposed federal rule takes effect, Minnesota will have the authority to request that recipients provide an explanation when they have made excessive requests for new cards.
Rep. Jim Abeler, R-Anoka, said the issue of replacement cards never came up in hearings on the food stamp program during this legislative session, and he was surprised to hear of Minnesota's high national ranking. He said it's "aggravating" that the department does not have more information available so that lawmakers could better judge whether programs are working, though he pointed to recently adopted legislation that clamps down on food stamp fraud in other ways, such as restricting spending to Minnesota and the four surrounding states and putting names on the cards.
"To make it 100 percent foolproof, you actually have to cause harm to some people who deserve the program, who are acting correctly," Abeler said.
Tightening restrictions on replacement cards does nothing to address another common scheme, which involves the food stamp recipient accompanying a buyer to the store and purchasing their groceries for them.
One Brooklyn Center man told the Star Tribune that he recently paid his cousin $100 for his EBT card, intending to use it to buy food for his 30th birthday barbecue.
But people don't necessarily need a replacement, he said: "It's easy for somebody to keep the card, or hand it around and get it back."
Larry Brown, a security guard from Minneapolis, said he uses his own food stamps for food, but sees people at the Cub Foods on the North Side walking up to shoppers and arranging trades of food stamps for cash.
"They do it all the time ... they go in the store with them, they just don't give their card," said Brown.
Officials acknowledge they cannot address such a scam without being present at every cash register in the state.
Said Abeler: "I don't know how you fix that."
Maya Rao • 612-673-4210