In Mendocino County, a woman who owned two homes and 12 vehicles collected $79,000 in welfare benefits using an ATM card issued by the state.
In Michigan, welfare recipients were caught collaborating with grocery store owners to trade their electronic debit cards for cash.
In Massachusetts, Gov. Deval Patrick has been on the hot seat after revelations about welfare cards being used to buy booze, smokes and lottery tickets.
Across the country, people have found creative ways of abusing Electronic Benefits Transfer cards, which have replaced monthly food stamp coupons and welfare checks as a means for poor people to put meals on the table and clothe their children.
Fraud investigators and program administrators insist that only a tiny percentage of welfare recipients intentionally scam the system, and that misuse of benefits has dropped since EBT cards were first introduced more than a decade ago.
Some states have claimed that EBT cards have led to a 90 percent reduction in fraud. But in California, according to an audit published last year, administrators have no concrete evidence that recent efforts to root out fraud in the CalWORKs and food stamp programs have been cost-effective.
"Far and away, most people follow the rules," said John Martire of the California Welfare Fraud Investigator's Association, a law enforcement group that works with counties to root out abuses of the system. "They are in a difficult situation in life, and trying to do their best. But a certain percentage of people have intentions of defrauding us as soon as they walk in the door."
The November 2009 state audit found that the California Department of Social Services and counties that distribute and monitor welfare benefits are not doing everything possible to detect and stamp out fraud.
"Neither the counties nor Social Services has performed any meaningful analyses" to determine whether their anti-fraud efforts have saved money, the California State Auditor's report says. Although ongoing investigations "likely help deter fraud, there is no way to measure this deterrence with any certainty," it said.
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