Investigation Uncovers People Selling Taxpayer-Funded Food Stamps

food stamp fraud Investigation Uncovers People Selling Taxpayer Funded Food Stamps

LOS ANGELES (CBS) — A CBS2 News hidden-camera investigation uncovered people selling food stamps, cashing in your taxpayer money.

With hidden cameras, we uncovered a black market of people offering to sell their food stamp benefits for cash, which is against the law.

With the cash they could buy whatever they want — perhaps alcohol, cigarettes or even drugs — things you can’t buy with food stamps, all coming from your money.

Nationwide 46 million Americans are now collecting $75 billion in food-stamp benefits.

In California it is called CalFresh and more than one million people in L.A. County are signed up.

The benefits range from $200 to $1,500 a month and the money comes through Electronic Benefit Transfer Cards (EBTs), which work like debit cards.

EBTs are not supposed to be shared. But we went on Craigslist and found no shortage of people offering to cash in on their food stamps, giving buyers bargains to seal the deal.

We saw ads for people selling $131 worth for $61; $70 for $50; and $200 for $150.

We answered one for someone offering to sell $200 in food stamps for $125.

Our undercover producer met with Matthew, who said he had just enlisted in the Navy, outside of a supermarket in Riverside. There he had more to sell, offering not only his EBT card, but someone else’s.

“This one is my friend Steven’s. I have his PIN number,” he said, adding, “This one is mine. I have my pin number.”

“OK, so he has $200 and he has definitely got it on his account,” our undercover producer asked?

“Yeah, I just called. It’s $200 on his card. I’ve got $110,” Matthew replied.

He wanted to deal.

“I have $310 right here,” Matthew said to our producer.

“Three ten?”

“Want to do it for $200,” he offered.

“Yeah, $200 would be great,” our producer replied.

He said he would go shopping with our undercover producer. She could pick what she wanted and he would pay with his EBT cards — the supermarket would never know.

We did not go through with it, but tried to talk with Mathew.

“You’re taking taxpayer money and you’re selling food stamps, right,” I asked?

“I don’t want to talk about it. I don’t want to talk about it,” was his response.

He went back inside the store, then tried to avoid our camera by coming out without his shirt on, using it to block our view.

“You’re in the Navy and you’re ripping off taxpayers?”

He was not the only one; we answered another ad.

“I’ve done it with friends. It’s no big deal,” said a man in Redondo Beach, who told us that he had done it before.

“You’re selling food stamps. It’s illegal,” I said.

“I wasn’t selling food stamps,” he replied, denying it at first.

Then he admitted that he knew a lot of people doing it.

“It’s pretty easy, right,” I asked?

“I guess so,” he said.

A woman also responded to an ad on Craigslist and told our producer that everything was on the up and up.

“Is it OK to do this? Is it legal,” our producer asked?

“Yeah, as far as I know. Friends and I have done it for each other,” she said.

But it is not.

Liz claimed that she did not know.

“No I didn’t. Honest to God, no one ever told me that,” she said.

But people like Latoya Pierce, a single mother who collects food stamps, thinks that it hurts everyone.

“It makes me very upset because first of all I’m struggling with my daughter and for people to get money and use it for something else is very wrong,” Pierce said.

In L.A. County the Department of Social Services administers benefits and investigates food stamp fraud.

They have about 160 investigators, but, believe it or not, they have only arrested about a dozen people in the past year.

We showed our undercover video to Lupe Luque, who is in charge of fraud.

“We answered the ad on Craigslist and met them at the supermarket. Why can’t your people do this,” I asked him?

“We are,” he replied.

“But you only had a dozen arrests in the past year. It doesn’t sound like you’re doing a lot about it,” I said.

“Not a lot, but we are doing it,” Luque responded.

But right now they are still out there.

What we uncovered may show the hidden underground of trading benefits for cash is more widespread and that taxpayers are footing the bill.

USDA Response To Our Investigation:

“USDA has a zero tolerance policy for fraud in the SNAP program and works with states to crack down on abusers who violate the program and misuse taxpayer dollars. In FY 2010, nearly 800,000 investigations were completed to combat fraud and reduce trafficking. These incidents will not be tolerated and the county should use their full authority under the law to make sure that fraud is punished and that bad actors are held accountable.”

-Kevin Concannon, USDA Under Secretary for Food, Nutrition and Consumer Services

If you want to report food stamp fraud, visit

More from David Goldstein
  • Ruth


    • Anita

      I see african american doing this every day outside the grocery store, and they have gold hanging from their neck and wrists, and then they drive off the parking lot in a brand new mercedes benz,lexus or a cadilac. So is not people who are coming to america from other countries is your own people that does not want to get an education or get a job, and the funny thing they are complaning that illegal immigrants are taking their jobs, yes the jobs that they do not want to do and the education they do not want to get. Most of those investigators are also african american and they are giving freebees to their friends and families. If you do not believe me go to the Welfare office one they and you will only see afrigan american working there.

    • mike


      I can’t even get a job.That’s because that aS$hole lawyer Robert Hale from Hale and Nguyen in Brea couldn’t help me with my case. Now I’m a bitter aS$puck that has a beef with law enforcement and everybody on the internet. I used multiple screen names like [GROW..APAIR], [wg//af], [up//yours], [Mike in San Diego], [Mike in Upland], [1stman] and [kma] so no one can track me down. I challenge people to meet me in front of the Fullerton P.D. station for my protection.

  • Connie P.

    Look it;s real simple even for you uneducated folks…IF YOU WANT TO LIVE IN AMERICA YOU MUST PAY TAXES LIKE EVERYONE ELSE..OR ELSE GO LIVE SOMEWHERE ELSE! these people have no business selling food stamps meant for the purchase of food to use as cash. Nice work CBS!

  • Artie

    Jesus Christ! No wonder the country has a deficit! That dude need to get booted from the Navy! I served in the Navy for 20 years and was embarassed…

    • allroadsleadtofema

      Thanks for your service squid :)

      Semper Fi

  • Joe from Fullerton

    Unbelievable! Scandelous!! all that ..all that!

  • null

    What are those “160 investigators” doing ? One explanation might be that arrests are not the best way to go. they are doing something else. Another would be that the sit around not doing anything. Really can’t tell, needs some more work.

  • smash44

    What do you expect in obama’s socialist Amerika? He gives them the hard-working middle-class’s money and then he and Michelle laugh about they are bankrupting the country. Of, and of course, as they dine nightly on caviar and Filet Mignon. You white idiots in this country that are going to vote for this black racist fool again deserve to die penniless.

  • Null and Void

    They make it so easy for people to get food stamps because they want you white people to eat…….like you were trying to do…… in the investigative report

  • romeny

    this lupe luque name speaks for its self. he or she knows that alot of this money is going to illegal mexicans. and the fraud unit run buy this person is not going to go after these illegal mexican

  • GROWAPAIR \\//

    all these people are “white trailer maggots” LOL

  • VeniceBytch

    I would sell my used tampons to a blood bank for some food stamps.

  • mzunderstood

    I’m truly shocked and disgusted by this story. I didn’t realize how widespread this was. As a recepient of general relief benefits, there’s no way I would even think about selling my stamps for cash. As much as food costs these days I need all the help I can get. Plus these people are going to make it harder for people who truly need food stamps that much harder to get them.

  • Sydney

    The Navy Sailor needs to be kicked out. Period. All these people make me sick that they rip off taxpayers and make recipients look bad. Some people really need these benefits to keep food in the house and this is what these fools do.

  • bob

    Anyone caught should be prosicuted for fraud and all benefits cut off

  • Dave

    Try looking a little deeper into how these people are being approved for food stamps and other tax payer funded benefits. Social Services has coined the phrase ” if in dought, give it out “. They give it away deciding that if it’s fraud, they’ll stop it later. Too late, it’s so bad that BILLIONS with a B are bing taken fraudulantly from tax payers. They feel that if they don’t give it away, they won’t get the same amount to give away in the next budget. DUHHH! Revamp DPSS and all the social services departments. Kick out the bleeding hearts and do the job right.

  • lee

    The FBI and DEA fabricate evidence, steal from suspects and use murder to close bad cases.

  • Gerard Armstrong

    I cant believe that Colin and Dirk would kick the kid out into the streets. Thats not cool man, at least my G Strings won the super bowl.

  • John

    Just make it harder to get on welfare. It will hurt the people who need it the most, but what else can you do? Remove the welfare program altogether and just give out jobs instead?

  • allroadsleadtofema

    People are really hurting in this country but others still find time to run scams. Tragic really.

  • Estelita I. Schmidt

    Hi! Mr. Goldstien keep the good work if you only knows how much I’m proud of for want you do I even want to meet you and help me to find my lawyer for my long term disability I will love to bad people pay for there crime !!! More power too!!! God blessed you and your family.

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