Iowa inmates illegally getting food-stamp benefits

2010-02-08T00:00:00Z Iowa inmates illegally getting food-stamp benefitsThe Associated Press The Associated Press
February 08, 2010 12:00 am  • 

DES MOINES, Iowa (AP) — Thirty percent of the inmates in the Polk County Jail last spring were illegally collecting food-stamp benefits, a state investigation shows.

Federal regulations prohibit people who have been jailed for 30 days or more from collecting food-stamp benefits while incarcerated.

But Iowa's food-stamp program, which is administered by the state's Department of Human Services, doesn't routinely check on recipients' compliance with that restriction. As a result, thousands of food-stamp beneficiaries are believed to be fraudulently collecting assistance while in jail.

The benefits can only be accessed by using an electronic benefits transfer card - better known as an EBT card - which is similar to a bank debit card. Some inmates have given their EBT cards to others, while some have sold their cards in return for cash they can spend while in jail.

Iowa's investigation was conducted last March, when officials with the Iowa Department of Inspections and Appeals checked the names of each of the 519 inmates who passed though the Polk County Jail that month. They found that 30 percent of the inmates - a total of 157 individuals - were illegally collecting food-stamp benefits while in jail for 30 days or more.

That number excludes inmates with families whose spouses were collecting and using food stamps for their own benefit.

The investigators alerted the Department of Human Services, which then halted payments to the 157 inmates, saving the state's taxpayers an estimated $200,000.

Bob Gorsuch of the Department of Inspections and Appeals said he was surprised at the extent of the fraud.

"It's almost overwhelming," he said.

Gorsuch said criminal charges will be imposed in some of the most egregious cases, but the state has limited resources. He said that in the past seven months, the four-person unit that investigates all types of food-stamp fraud in Iowa has opened 1,119 investigations.

Although the state doesn't have the resources to continually review the status of every inmate in even one of Iowa's 99 counties, the Polk County Jail is now giving investigators information on the 30 or so inmates who each month are transferred to state prisons for long-term incarceration.

Investigators are checking those names against the list of food-stamp beneficiaries to make sure the Department of Human Services cuts off benefits. In January and February of this year, almost a third of the prison-bound jail inmates were still collecting food-stamp benefits.

"We've even found inmates in the Oakdale and Fort Madison prisons who are still on assistance," Gorsuch said.

He said state investigators and federal prosecutors are now looking into similar fraud in Linn County jails.

"And what they're finding there is a similar percentage of fraud," Gorsuch said. "And remember, we're only talking about two counties - Polk and Linn - out of 99 counties in Iowa."

Fred Scaletta of the Iowa Department of Corrections said that each month the agency sends the Department of Human Services a list of new inmates so the names can be checked against Medicaid and child-support records.

"But we don't do that for food stamps," Scaletta said. "However, we've not had an issue with inmates receiving food stamps. We've just never had an issue with that."

It's not clear why the Department of Human Services doesn't cross-check the monthly list from corrections with its own list of food-stamp recipients.

Asked what the agency is doing to prevent the collection of benefits by inmates, Department of Human Services spokesman Roger Munns said, "When the DHS is informed that a person has been in jail for more than 30 days, food-assistance benefits are canceled."

Last year, 307,000 Iowans collected $455 million in food-stamp benefits. The average monthly benefit was $123.44. That represented an 81 percent increase in beneficiaries from 2004, when there were 170,000 recipients collecting $190 million worth of benefits.

Court records show how some Iowa inmates are able to make use of food-stamp benefits while incarcerated.

In 2008, Joseph Kramer was sentenced to eight years in prison on drug charges. While in jail awaiting sentencing, he collected four months worth of food-stamp benefits. During that time, his EBT card was used 34 times for $519 worth of purchases.

Investigators later alleged that Raymond H. Krug, who runs the nonprofit, tax-exempt Cedar House Shelter in Cedar Rapids, was videotaped at a Wal-Mart store using Kramer's EBT card. They also alleged that Krug deposited $70 into an account Kramer had access to while in jail. Kramer had lived at the Cedar House Shelter before he was jailed.

Krug said last week that he doesn't recall much about the incident.

"I'm unaware of how I happened to come across that card or get the PIN number to it," he said.

Asked why he sent money to Kramer's jailhouse account, Krug said that each year he gives people in need a total of $10,000 to $12,000.

"So that is not unusual," he said. "I have given money to individuals because I like to see them smile."

Krug was not charged with any crimes, but the alleged fraud led to Kramer being given a longer prison sentence on the drug charge.

In Des Moines County last year, prosecutors charged Joanne Petrie of Burlington with one count of forgery for allegedly using the EBT card of her boyfriend, Paul Scola Jr., while Scola was in prison. Petrie was accused of using the card at various grocery stores to purchase $1,000 worth of food.

She pleaded guilty to a reduced charge of third-degree theft, was fined $650 and ordered to make restitution.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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