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SPECIAL REPORT: Stopping Welfare Fraud

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When times are tough and money is tight, there's help for families struggling to put food on the table.

It's called SNAP (Supplemental Nutrition Assistance Program ) - or food stamps. According to the government, the number of people receiving food stamps in this country is at an all-time high.

By one estimate, since 2000 the number of food stamp recipients has more than doubled to 15% of the U.S. population. Since 2009, the number of Tennesseans enrolled in the food stamps program jumped about 25% to 1.3 million people.

Recipients get SNAP benefits through an EBT card. The card, swiped like a credit card, deducts the amount of the purchase from the recipient's monthly allotment.

EBT cards also give welfare recipients enrolled in Tennessee's Families First program access to cash benefits at ATM's. "Families First provides temporary cash benefits to families who have children, and are experiencing financial difficulties," according to a state website.

But an investigation by the non-profit watchdog group Beacon Center of Tennessee found people used EBT cards to spend taxpayer money at liquor stores in Memphis, a bar in Chattanooga, a nightclub and at the Orpheum Theatre in Memphis, at a strip club in Knoxville, and at the Graceland Mansion in Memphis.

"It's really disheartening to see so much of this money going to things like liquor and to strip clubs when it's designed to provide necessities to children of welfare recipients," said Justin Owen, President & CEO of Beacon Center of Tennessee.

Everetta Altman agrees.

"It's been a big help to me," Altman said. The Johnson City retiree gets approximately $50 a month deposited through Tennessee's SNAP program onto her EBT card.

"I'm on a very small fixed income. It helps me to reach out and get something that's a little more expensive."

State regulations place firm limits on the types of food that can purchased with EBT cards. Many items like prepared foods and some energy drinks aren't allowed.

News Channel 11 pulled EBT transactions in the Tri-Cities for the month of December 2012. The cards were used for SNAP transactions and cash transactions at ATM's. Based on the data, it's impossible to know how the money was used. Cash advances are supposed to be for covering the costs of necessities for individuals and families enrolled in the program. But there is no way to know how the money is spent.

In many cases, people used EBT for large transactions at convenience stores where food options largely consist of snack foods. We found that one day last December, someone with an EBT card spent $182.95 at a Kingsport convenience store.

"If it's a several hundred dollar transaction in a convenience store, that begs the question: what exactly are you buying there?" Stone said. "There aren't that many necessities you can purchase in that type of store."

The State of Tennessee is taking steps to crack down on EBT card abuse. The House and Senate recently approved bills that will penalize welfare recipients who use EBT cards in liquor stores, strip clubs, or gaming establishments.

The bill is awaiting Governor Bill Haslam's signature.

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