Target 8: Welfare fraud exposed

An officer investigates welfare fraud


GRAND RAPIDS, Mich. (WOOD) – On a recent weekday afternoon in a car across the street of a lakeshore-area party store, Andrew Kustowski fired up his laptop computer, set a video camera on the dashboard and recorded customers going in and out.

Kustowski is one of 10 agents known as “benefit trackers” who are charged with rooting out food stamp fraud in the state of Michigan.

From his vantage point across the street, Kustowski, who oversees the program, has set a trap designed to recapture a portion of the millions of dollars of taxpayer money lost to Bridge Card abuse.

“When we’re looking at the population of Bridge Card recipients, you can see in a particular store what’s going on,” Kustowski said

By hitting refresh on his computer, Kustowski can tell if a Bridge Card is used. Names and numbers are tracked in real time.

“The street value for a Bridge Card is 50 cents on the dollar, however, the store gets reimbursed 100 percent – so there is nothing for them to lose,” Kustowski said.

Food stamp fraud is a multi-million dollar underground economy with taxpayers footing the bill.

The benefits that are carried on Bridge Cards are intended for the needy, for food. Fraud occurs when the cards are instead turned into cash or used to buy booze, gasoline or traded for drugs.

The state is trying to change that, one case at a time. For the 2014 fiscal year, the state has already conducted almost 1,300 investigations identifying millions of dollars in fraud.

Agents demonstrated for Target 8 just how they go about investigating and then contacting suspected scammers. By monitoring those most modern of marketplaces like Facebook and Craigslist, they look for scammers looking to make a trade. In the stores, they look for anomalies in store purchases that stand out.

Some of the busts have been big. In September, agents uncovered $5 million in fraud by workers at two meat markets in Flint and Saginaw. A sting at Detroit’s famed Eastern Market resulted in charges against 9 people after a two-day stakeout.

Agents invited Target 8 on a total of three sting operations through two counties and over two days.

“Once you get to the reality of the situation, it goes pretty smoothly,” Kustowski said.

Qualification for food stamps is determined by factors like age and income. People who get government aid for home heating, for example, automatically qualify for food stamps. The abuse isn’t rampant, but the state wants to crack down.

Once agents build their case, they attempt to make contact with individual recipients in hopes of rectifying the situation.

Kustowski can offer a repayment agreement and a disqualification prohibiting the violator from receiving food stamps for 12 months. Or, if an agreement can’t be reached, agents can prepare a report for prosecutors.

When Kustowski makes contact, his case is already built. When confronted, many accused violators deny responsibility at first, but when faced with Facebook screen grabs and transaction records, most capitulate.

“The ultimate goal is to get people to admit to their actions,” Kustowski said.

 

 

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