I-Team Investigation

Cashing in on food stamps

CREATED Nov 19, 2012

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MILWAUKEE - Quest--it's food stamps for a digital age. All you have to do is swipe, and it's everywhere--dollar stores, gas stations, beauty shops, candy stores, and even liquor stores. They all have access to Foodshare dollars--making millions.

So why is a program claiming to be nutritious handing out $1 million a day to Milwaukee stores?

The I-Team goes undercover to investigate the vendors who have access to your money, and expose exactly what's USDA approved.

Debra Vanderboom made it her mission to fight fraud--first as a Waukesha County cop, later as president of the Wisconsin Anti-Fraud Association. She acknowledges the Foodshare program is necessary.

"The vast majority of the people are honest, hardworking people that are in lower paying jobs and need those benefits and deserve those benefits," Vanderboom explains.

She also says those benefits are out of control, and not properly regulated by the USDA. "Get those benefits out there and whatever happens, happens."

What's happened is a huge influx in the number of people who use the program and the stores that offer it. A quick look at the USDA's store locator website proves that. The stores are practically on top of one another--700 stores in the city of Milwaukee alone.

In each of those 700 stores, there's a machine. It's similar to a credit card reader, but it's just for Foodshare cards. You don't have to scan individual items, just enter a total, swipe the card, and the USDA gives the store owner the money--your tax payer dollars.

According to USDA rules, booze and tobacco are forbidden. Store owners also can't just use their Quest machines like ATMs. But there's no itemized receipts, the USDA banks on honesty.

"There's very little prosecution," Vanderboom says.

The USDA says it has over 100 investigators and analysts. That sounds reasonable for all of Milwaukee, or even Wisconsin, but when you add up the almost quarter of a million stores in the U.S, the enforcement disappears.

So the I-Team did some investigating. According to the USDA's list of Foodshare vendors, a record store, has access to your money. When we confronted the owner he said they were closed due to remodeling for the past 2 weeks.

But if you check out our hidden cam video shot less than a week earlier, the store was definitely open. We found beaters and boxers, but no nutritious food.

Each store is also required to have a certain amount of healthy food at all times: 3 entrees, 3 fruits, 3 dairy products, and 3 cereals.

We found candy! The owner of a candy store spoke to us in his back room, showing us some canned goods he had in stock. He said, pointing to the cans, "This qualifies. This is a fruit. You know this is vegetables. This is what qualifies you."

There's also a tobacco store with empty shelves and coolers. The owner would only talk to us over the phone.

Jermont: "How long have your shelves looked like they do right now, completely bare with one loaf of bread on the shelf?"

Owner: "Last week I think. Last week, yes."

But this wasn't our first visit. We went there multiple times beforehand, and week after week found the same thing.

We brought our hidden cam video to Milwaukee Common Council President Willie Hines. He said, "It is disappointing to know that they are not being monitored as extensively as they should be."

We're not done. On the list of active vendors, we discovered a dollar store that was never open, and another candy store.

We have video of the owner of Sticky Fingers House of Candy applying for a city food license back in August 2011. The license was denied.

The store is not open. It doesn't have a license, but it's still listed today as a business that can take your money. So Hines says, "So the question is "What are they offering right?'"

The list of stores is updated every 2 weeks. There are more than 700 active foodshare vendors in Milwaukee County. Again, still there's businesses that appear to be closed and are on the list.

We asked the USDA how much money it's giving to each of these vendors. Right now the USDA says it will not disclose that information due to privacy issues, but TODAY'S TMJ4 is not done searching for answers on this story.