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"Our investigations and disqualification process have been thorough and methodical to ensure that the abusers are properly disqualified," said DCFS Secretary Suzy Sonnier. "This is a unique type of fraud compared to the cases we usually encounter."
Immediately following the October 12, 2013, outage, DCFS began reviewing transactions made by 12,000 clients and determined that some were made by people who were no longer eligible for the program or who did not have sufficient funds in their balance to pay the retailer for the goods purchased. No unauthorized taxpayer dollars were used in Louisiana during the multi-state Supplemental Nutrition Assistance Program (SNAP) EBT transaction outage and the retailers are responsible for the cost of any non-sufficient funds transactions.
DCFS' Fraud and Recovery Unit began pursing the 500 most egregious transgressors, who attempted to spend $315,386 that they did not have available in benefits. Those transactions ranged from $300 - $2,000. The agency sent target letters and questionnaires to those 500. As of February 20, DCFS has received 113 responses and scheduled 109 interviews.
"Responses to the disqualification letters have ranged from admitting to committing the fraudulent transactions, to declaring no knowledge of the transactions, and to stating that the retailer told the clients it was 'okay' to perform the transaction because 'the government was shut down,'" said Sonnier. "Regardless of circumstances, knowingly attempting to spend more than the balance on your card or allowing others to do so is grounds for disqualification."
Based on the returned questionnaires and evidence collected by DCFS, including the interview, DCFS' Fraud and Recovery Unit initiated the necessary process to terminate benefits for 31 clients through an Administrative Disqualification Hearing. Administrative Disqualification Hearings, which are administered by independent and impartial Administrative Law judges, follow established administrative processes for program disqualification. Six violators chose to waive their right to a hearing and will be disqualified beginning March 1.
"The investigation and disqualification process is ongoing and we expect it to result in additional disqualifications," said Sonnier.
Federal guidelines state that a first time SNAP violation will result in a 12-month disqualification from the SNAP program. A second offense will result in being disqualified for 24 months. Third offenses will result in a permanent disqualification from the SNAP program.
DCFS has shared the initial information gathered with state law enforcement officials, including the Louisiana State Police, the Louisiana Attorney General and all of the state's District Attorneys, so that officials could begin their own investigations to determine if any criminal laws were violated.
"Several District Attorneys have requested more specific information in order to potentially initiate criminal investigations in their jurisdictions," said Sonnier. "DCFS has provided that data and will continue to assist all state and local law enforcement officials who are standing with us as we attack fraud within public assistance programs."
Louisiana has some of the strictest entitlement fraud laws in the country. Last year, DCFS worked with the legislature to pass what is believed to be the first mandated reporter law for SNAP. Under RS 14:68.2.1, DCFS employees, owners, employees or operators of retailers that accept SNAP, and adult household members of SNAP recipients are subject to up to $5,000 in fines for failing to report known unauthorized use of SNAP benefits.
Additionally, under RS 14:68.2, those convicted of unauthorized use of SNAP benefits face penalties ranging from $5,000 and/or six months in prison to one million dollars and/or imprisonment of up to ten years.
"This event has reinforced for us that changes need to be made on the federal level," said Sonnier. "We will work with our federal counterparts to strengthen our abilities to attack fraud and protect the system for those it is designed to serve.
DCFS' Fraud and Recovery Unit works year round to investigate alleged fraud, disqualify and prosecute offenders. In State Fiscal Year 2013, DCFS recouped $2.5 million in fraudulently obtained payments in SNAP, Family Independence Temporary Assistance Program (FITAP), Child Support Enforcement (CSE) and Child Care Assistance Program, as well as disqualifying 685 recipients and working with law enforcement to prosecute 144 recipients. DCFS was also awarded a $252,000 incentive award in 2013 for its fraud and recovery work. Those funds were reinvested into the Fraud and Recovery Unit.
If a member of the public suspects someone is illegally receiving public assistance benefits or is illegally using an Electronic Benefit Transfer (EBT) card, they should fill out DCFS' online complaint form at www.dcfs.la.gov/ReportFraud or call 1-888-LAHELP-U and select option 7 from the main menu.
SNAP is administered in Louisiana by DCFS and overseen by the United States Department of Agriculture (USDA) Food and Nutrition Service. USDA is an equal opportunity provider and employer. Read more about recipients' rights.