Food stamp fraud prosecutions drop; cash obtained from recipients who got money because of agency error up

HOUSTON (KTRK) -- As millions of Texas taxpayer dollars are lost each year because of food stamp fraud -- $15 million in food stamp monies were ripped off last year alone -- the state agency that oversees the program has cut back on the number of fraud cases they hand over to local district attorneys for prosecution.

In 2010, the state Health and Human Services Commission, which administers the federal food stamp program, referred 2,529 cases of fraud to local DAs, according to records obtained by ABC-13; in 2011 that number was 2,022.

By 2013, the number of fraud referrals had dramatically dipped to 371, an 82 percent decrease.

The reason for the decrease comes from a decision made in 2011.

"We got permission from the federal government," said Health and Human Service Commission spokeswoman Linda Edwards Gockel.

Now, according to two law enforcement sources, only those who defraud the government of more than $5,000 are prosecuted. Gockel would not say if $5,000 was the threshold, only that the threshold was raised.

"We asked if we could raise the threshold so that means that we would investigate cases with higher dollar amounts," she said. "We wanted to spend time on cases that would bring us better return on the taxpayer dollar."

Records show that the total amount of money obtained from fraudulent food stamp users has not changed substantially when compared to before the rule change.

In 2010, the state recovered $7.7 million in fraudulent food stamp monies, according to records. In 2011, the year of the rule change, $6.7 million was recovered.

After the rule change, $7.9 million was recovered in 2012, and $6.8 million recovered in 2013.

The state says that the new rules mean fewer resources are needed to prosecute cases.

But the numbers make little sense to Claudia Wolff. She feels like a criminal, but is certainly no law-breaker.

"Why aren't they going after all the fraudsters," she asked. "Why are they going after people like me?"

Wolff, a 60-year-old on disability applied for food stamps in the spring 2011 and was approved. After her liver transplant she needed a special diet, and the $200 a month she received in food stamp aid helped, she said.

But two-and-a-half years later the state said she didn't qualify for food stamps and never should have. What's more, the state wanted all the food stamp money back, a total of $5,013.

She says the state has even threatened to garnish her Social Security disability check, something that ABC-13 heard on Friday has happened to others.

"I don't think it's right at all, not at all," Wolff said.

And while the state of Texas remains relatively steady with the amount of food stamp fraud money prosecutors are able to recover, clawing back the money from food stamp recipients who received aid through agency error is a comparative success.

In 2009, the state got back $1.9 million from food stamp recipients who received food stamp money in error, records show. In 2013, that number climbed to $4.6 million.

ABC-13 reported Thursday that Wolff, along with nearly 40,000 SNAP recipients were overpaid because of agency error to the tune of almost $41 million since 2009.

State officials readily admit it's their mistake. They also say there is nothing they can do to help. Federal food stamp rules insist the state get back the money from recipients who have been overpaid food stamp money, even if it's because of an agency slip-up.

Wolff was also shocked about another piece of information uncovered by ABC-13: The state Health and Human Services Commission received a $6 million bonus for accuracy inputting recipients' food stamp information.

Of that bonus, $5.4 million went to Health and Human Services Commission staff bonuses.

Zero went to help pay the bills created by the commission's own errors.

"I just couldn't believe it," Wolff said,

Producer: Trent Seibert