Federal audits show the Agriculture Department has replaced hundreds of millions of dollars in stolen food assistance benefits amid continued reliance on decades-old card technology vulnerable to fraud.
By yourNEWS Media Newsroom
The U.S. Department of Agriculture has replaced $322 million in stolen food assistance benefits since late 2022, with hundreds of millions more expected in the coming years, as the agency continues to rely on outdated electronic benefit transfer card technology that federal investigators say leaves recipients vulnerable to fraud. The scope of the losses and the technological shortcomings were detailed in a recent Judicial Watch report examining federal oversight of the Supplemental Nutrition Assistance Program.
SNAP provides food assistance to approximately 41.7 million people at an annual cost of $99.8 billion, according to USDA data. Between October 2022 and December 2024, the USDA’s Food and Nutrition Service reimbursed $322 million in benefits stolen through card skimming and cloning schemes. An additional $233 million is projected to be replaced in fiscal years 2025 and 2026, according to federal records.
The issue is examined in detail in a recent audit released by the USDA Office of Inspector General, outlined in a public report. The audit found that while most financial institutions have transitioned to chip-enabled cards, SNAP benefits are still distributed using magnetic stripe cards, a technology that has been in use for decades and is highly susceptible to fraud.
Usda Report by yourNEWS Media
The Inspector General’s report explains that criminals can use card skimmers to capture data from magnetic stripes and transfer that information onto counterfeit cards. The report cites Federal Bureau of Investigation estimates that card cloning fraud costs consumers and financial institutions roughly $1 billion annually. According to the audit, chip-based cards provide stronger protection because they generate a unique, one-time transaction code, making it significantly more difficult to reuse stolen data.
Congress directed the USDA in 2022 to develop rules requiring states to transition to more secure card technology. However, the Inspector General reported that the agency has not yet implemented such a mandate. As a result, states have continued to experience large-scale losses, with New York reporting $50.68 million in reimbursed stolen benefits, followed by California at $28.08 million, Maryland at $22.53 million, and Texas at $21.18 million. Florida, Ohio, Alabama, and New Jersey have also reported tens of millions of dollars in replacement payments.
Federal officials described the situation as an ongoing nationwide issue affecting the integrity of the SNAP program. In response to widespread theft, the USDA established a special replacement system that allows recipients to recover benefits reported as stolen. During the program’s first two years, the government paid $61.5 million to replace benefits in 127,290 cases. That figure later rose to more than $102 million covering 226,196 claims, according to the latest figures published in the SNAP Replacement of Stolen Benefits Dashboard.
In parallel with reimbursement efforts, the USDA has taken steps aimed at fraud prevention. Last year, the agency invested $5 million in an initiative known as the Fraud Framework, which provides financial incentives to states to identify organized card skimming operations and cases where recipients intentionally violate program rules.
The broader fraud concerns were underscored by a recent federal criminal case involving a longtime USDA employee. According to the Department of Justice, the employee and several others were charged in what prosecutors described as one of the largest food stamp fraud schemes in U.S. history. The scheme allegedly generated more than $66 million in unauthorized SNAP transactions through bribery and abuse of the program.
Despite repeated audits and congressional direction, the Inspector General reported that SNAP benefits continue to be distributed through technology widely viewed as outdated, leaving the federal government and taxpayers responsible for replacing stolen funds while broader modernization efforts remain incomplete.
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