Welfare Fraud Still Plagues California

JULY 5, 2011


Vacations subsidized by fraud. Welfare to those not meeting work demands. Welfare cards used to buy coffin nails and fire water.

After such outrages, one might think the California Department of Social Services would reform itself. Especially at a time when the state can’t pay its own bills. Nope.

California is the leading welfare provider in the United States. It pays for the largest number of welfare fraud cases — with little sign of reversal.  This wide-ranging fraud includes extracting welfare money from casinos and cruise ships, the failure of welfare recipients to meet work requirements, and filing false returns.  What a mess.

Reported the Orange County Register, “California is nearly twice as big as New York state, but we have five times as many welfare cases.  According to the Public Policy Institute of California, our state is one of the only nine that does not enforce the federal government’s five year lifetime limit on cash welfare assistance.  The monthly cash check is almost  70 percent higher than the national average.”

The prevalence of welfare fraud is disheartening.  Last year the Los Angeles Times broke the news that millions of dollars were withdrawn from welfare cards at destination hot spots across the country.  Jack Dolan wrote, “More than $69 million meant to help the needy pay their rent and clothe their children was accessed in 49 other states, the U.S. Virgin Islands and Guam between January 2007 and May 2010, according to data from the California Department of Social Services.”  More than $11 million was blown in Las Vegas. No one knows if Elvis got some of that.

And another $16,010 was withdrawn from cruise ships to Long Beach, Rio de Janiero and Beijing. Let’s hope the buffets were worth it.

In response, Gov. Schwarzenegger ordered the deactivation of ATMs for welfare cards across the country at gambling venues and cruise ships. But it was a minor reform.

Shirking Work

Besides the gross misuse of welfare benefits, recipients are not meeting their expected work requirements.  Out of a sample of 310 welfare cases, only five individuals participated in activities that moved their family toward self-sufficiency, according to a California Department of Social Services’s study in March 2011.   Only 60 of the 310 cases participated in countable work activities.

While many welfare recipients are failing to pull their own weight, California Department of Public Social Services workers aren’t much better.  One worker, Trang Van Dinh, was found filing nearly 200 fraudulent tax returns, preying on those who were seeking help.   He used clients’ personal information to file false tax returns in 2009 and 2010.

After victims found their tax returns delayed, only then was attention brought to the case.  He pleaded guilty in February to two felony counts, which earned him 46 months in jail and $667,000 in restitution.

So what steps is California Department of Social Services taking to reverse the fraud?  On July 1, 2010, the CDSS provided a response to Schwarzenegger’s Executive Order S-09-10, in which they listed 10 proposals, including plans for early fraud prevention and funding.  Proposal six of the plan states that CDSS would dedicate funding to be used for anti-fraud activities to implement an Early Fraud Program. The program would allow county Special Investigation Units aiding in detecting withheld information.

Proposal eight would create a fraud investigative resource program within the existing Fraud Bureau, which would serve as the foundation for business intelligence needs on fraud prevention and investigations.

Proposal nine would enhance, expand and automate the Income Eligibility and Verification System, which would verify the accuracy of a clients identity and citizenship status and identify false social security information.

Proposal ten would implement a welfare fraud analytics system that would provide information that would help identify fraud in these benefit programs.

Investigations Decrease

With all of these initiatives to improve intelligence, common sense would suggest that more fraud investigations would be taking place.  Instead, the number of investigations has actually decreased.  In July 2010, when the proposals were written, 6,092 investigation requests were accepted for the Food Stamp program.

By January 2011, the investigation requests went down to 5,437.  The number of pending investigations for CalWorks and Food Stamps were 117,745 in July 2010.  Six months later, 23,103 more cases were pending at the end of the month.

Rather than increase the number of welfare fraud investigations, it appears as if the Department of Social Services has failed to use new fraud detection measures and ensure that the taxpayers’ dollars are not going to waste.

A final outrage is that welfare recipients are allowed to use their Electronic Benefits Transfer (EBT) cards to buy booze and smokes. Senate Republican Leader Bob Dutton of Rancho Cucamonga proposed SB 417. It would have banned using the EBT cards to purchase  alcohol and tobacco products. It didn’t pass.

“You would think a simple common sense reform like trying to make sure taxpayer money is not used for the purchase of alcohol and tobacco would find bi-partisan support,” Dutton said.  “There definitely need to be reforms in this area.  Thirty-three percent of the budget is spent on health and human services.

“If we can’t stop welfare recipients from buying cigarettes and alcohol, we have a problem,” said David Wolfe the Legislative Director at the Howard Jarvis Taxpayers Association.

Of course, there is a way for welfare recipients to buy cigarettes and whisky: get jobs and pay for it themselves. But for now, the Democratic majority in the Legislature favors letting taxpayers pick up the party tab.


Write a comment
  1. larry 62
    larry 62 5 July, 2011, 13:03

    The “We accept food stamps” sign says it all.

    Reply this comment
  2. RT
    RT 5 July, 2011, 15:01

    Yes, CalWORKs does lend itself to fraud. This is what happens when you have little or no expectations of those on aid. This lack of expectations runs throughout the CalWORKs program. Unfortunately the way CalWORKs is currently designed, it does not hold parents accountable for improving their lives and moving toward employment. While there is a “Work Participation Rate” (WPR) that State must meet, it is meaningless. For those who are meeting the hours that are required, far too many are “warehoused” in work experience and other activities and are never expected to find an actual paying job (even with this warehousing CalWORKs has less than 30% of mandatory clients participating in activities.).

    CalWORKs must be reformed to hold Counties (and ultimately parents) accountable. Base the programs success not only on the percentage of those clients who are participating, but more importantly on the number of clients who find an actual paying job and are able to move off welfare and become self supporting.

    The goal of CalWORKs should be to move clients out of poverty, not to keep families reliant on the system. You can fight fraud by having some expectations of those who receive aid.

    Reply this comment
  3. Stephen
    Stephen 5 July, 2011, 16:36

    RT hit the nail on the head, “CalWORKs must be reformed to hold Counties (and ultimately parents) accountable.” But it will not be changed because it pumps so much money into each County in the form of “benefits”. What County wants to lose millions from the CalWORKs grave train ?

    Reply this comment
  4. Liberty427
    Liberty427 5 July, 2011, 19:08


    Reply this comment
  5. Sandra
    Sandra 5 July, 2011, 22:39

    At the same time, California Department of Child Support Services fails miserably at collecting child support. There is currently a $19 BILLION dollar child support arrearage in California alone! The LA County Department of Child Support Services only collects about 50% of the current support due.

    Reply this comment
  6. Reality
    Reality 6 July, 2011, 09:56

    This article is very misleading. Food Stamps cannot be used to buy anything but food. The sign above is obviously a retailer in a rural area that sells both. But keep up the dishonest work, Ali, so you can justify hacking out the safety net when there is 10% unemployment in the state. Add in everyone on public assistance and the rate would be nearly double. Just hope you never need it.

    Reply this comment
    • Taxpayer
      Taxpayer 13 June, 2015, 11:17

      Your CRAZY!I have been in line at the grocery store in California which is not rural at all and watched someone buy beer with their food stamps,You obviously have no idea what ur talking about

      Reply this comment
      • crustybob
        crustybob 7 March, 2017, 15:32

        It’s the retailer. They are the ones processing the transaction, not the government. They will take money from any place possible and chance an audit because the fines are less than what they will make by doing this.

        Reply this comment
      • crustybob
        crustybob 7 March, 2017, 15:36

        Hell, half the people I know on it live in Mexico. They come here every few months to get their money and food stamps then head back to Mexico. WTF! Stop that n we’ll have enough for the REAL American citizens to get by. Hell even get better benefits.

        Reply this comment
      • Eleanor Killgore
        Eleanor Killgore 23 April, 2022, 10:03

        I’m ready to report a resident living here. I just need to know how to go about reporting him. He’s lazy and just doesn’t want y to o work. I’ve worked since I was 17y. This makes me sick.

        Reply this comment
  7. StevefromSacto
    StevefromSacto 6 July, 2011, 10:06

    Attention all you so-called fraud-fighters out there.

    Where were you when our Attorney General Kamala Harris busted the giant medical laboratory company Quest Diagnostics to the tune of $241 MILLION for overcharging the Medicaid program for years? Where was your applause?

    Any fraud is wrong and should be investigated and prosecuted. But why can’t you muster the same fervor for going after big white-collar government contractors and other businesses, whose taxpayer rip-offs dwarf the meager amounts possibly scammed by low-income welfare recipients?

    Reply this comment
  8. James E. Miller
    James E. Miller 6 July, 2011, 12:07


    Your username is clearly misguided if you think you disproved anything in the above article with your idiotic comment. Of course that store sells food, what type of food is the real question. I am taking a chance here, but I highly doubt a place that sells cigarettes and beer is also selling nutrient rich groceries.

    Hacking out the safety net and preventing gross misuse are two different things. A sixth grader could tell the difference. Last time I checked, a welfare safety net isn’t meant to be used to fund cruise vacations or gambling. Next time you accuse someone of being dishonest, don’t make brass assumptions of economic trends you are clearly not qualified to speak on.

    Reply this comment
  9. Ali Meyer
    Ali Meyer 6 July, 2011, 12:35

    The bill to prevent sales of alcohol and tobacco when using EBT cards was not passed.

    Reply this comment
  10. Lea
    Lea 6 July, 2011, 13:12

    I would concur with RT, the CalWORKs program needs to be refocused to serve those who understand they need to find work. When you give someone everything and expect nothing in return, why are you then upset they will find ways to get even more?
    We should demand CalWORKs reform now!

    Reply this comment
  11. bob
    bob 8 July, 2011, 13:36

    They are talking about the food they sell not the liquor or cigs, that is illegal and they would be shut down!!! Calm down people, even 7-11 takes ebt for food.

    Reply this comment
  12. John Seiler
    John Seiler 8 July, 2011, 14:08

    StevefromSacto: We’ll check into that Medicaid fraud you mentioned by Quest Diagnostics.

    But the ultimate way to end Medicaid fraud is to end Medicaid. Let the poor depend on the loving care of friends and charity, instead of the impersonal and uncaring government bureaucracy. That’s what worked wonderfully well before 1965.

    Reply this comment
  13. brent
    brent 4 November, 2011, 03:19

    re john seiler i really do not think that system will work anymore its been 45 years ago county hospitals were the bid deal then not any more they could never handle the load the same with charitys

    Reply this comment
    • Joe
      Joe 18 August, 2020, 04:34

      Without being able to debate you in an honest manner, the only reasonable conclusion I can come up with is youre living in a Libertarian fantasyland. A hellscape, since 1964.
      The proposal you make is heartless, cruel, totally unworkable and counter-productive.

      Reply this comment
  14. Jackie
    Jackie 15 March, 2012, 23:43

    I’ve seen first hand women with LV purses and driving Mercedes using food stamp to buy groceries and use Medicaid to pay for their kids healthcare. I don’t deny the problems exist, but what can we do about it? We all know what need to be done, but people are not doing anything becuz they don’t know how, how can we, the taxpayers help end this abuse?

    Reply this comment
  15. Michelle
    Michelle 4 May, 2012, 12:14

    Fraud on any and all levels is wrong. I know someone that has been collecting Welfare, food stamps and has subsidized housing for over 20 years now. When she was required to look for work, she would go in to businesses, take a business card or and application and give them to her social worker and say that she applied at these places. She never did. She is able bodied and intelligent, but refuses to work. Her lifestyle is not what I have a problem with. It’s the fact that I have to get up every day and come to work to make my living, so that I don’t need these programs. What right does someone have who can and just won’t work, to sit on their ass and collect (what they consider) free money? I agree that there may be times in life where somene may need some help and that’s fine. But to use it for most of your life cause you’re just lazy, UNACCEPTABLE.

    Reply this comment
    • nik
      nik 4 October, 2018, 10:12

      You have a crabs in the bucket mentality. Why don’t we all demand basic pay and still be allowed to work and make even more money if we choose to.

      Reply this comment
    • Joe
      Joe 18 August, 2020, 04:30

      Have you reported her? If not, why not?
      Google CA WELFARE FRAUD and I think there’s an online reporting tool.

      Reply this comment
    • Eleanor Killgote
      Eleanor Killgote 23 April, 2022, 10:22

      Yes, these abusers of a broken system need to be taken accountable

      Reply this comment
  16. Kay
    Kay 31 May, 2012, 22:51

    Welfare fraud is being done all on the inside. They print the “checks” (cards, now) but theres aaa “hold” and hte money gets “taken” making it look like the recipient got it when they didn’t. Also they will “deny” services and still it is being put into somewhere…even if it was a reapply and no money was sent but was taken. only later to find out that they say you got it when you di not!!!. Even the “Notices of Action” will be totally wrong on paper but not in the computers. and “checks” that looks like you cashed them could NOT have been cashed because certain stores DO NOT cash any checks for anyone . Period. It will all come up their way at the “hearing” if you ever have any…When any of this happens it will usually affect the free lunch programs at schools and then they’ll start sending a bill for their breakfasts/lunches, and then put children on a CEC program instead of Medi-Cal because of the many reasons it could be but isn’t… (Continious Eligibility for Children) making it look as though their not in thae home or someone else has them. Even go so far as sasying you didn’t bring this or that after the fact, even when you ask them if they have everything they need, and getting a reply of YES, then a deny reply… It may or may not be in the “local” dept. but it’s somewhere….I know!!!!

    Reply this comment
  17. Kay
    Kay 31 May, 2012, 22:52


    Reply this comment
  18. Kay
    Kay 31 May, 2012, 22:53


    Reply this comment
  19. kevin
    kevin 19 December, 2012, 06:37

    my ex wife left me and the kids to be with her boyfriend in california leaving us high anddry . what does california welcome her with open arms and a welfare and food stamps for a dead beat mom. Your state is a joke handing out money to dead beat mom, who dont pay child support to her own kids.But her boyfriend knows the system, lucky for her huh,..all i can say is good luck to barb sweeney dead beat mom of the year

    Reply this comment
    • J.K.
      J.K. 27 February, 2017, 11:17

      Yes that is wrong. It shouldn’t be just for women. I know alot of people who know how to work the system.. Welfare is broken & needs to be fixed. Those who need it & others get it by fraud

      Reply this comment
  20. J.K.
    J.K. 27 February, 2017, 11:04

    THRE IS SO MUCH WLFARE FRAUD. People should have to get jobs. Men live with the women, but say they don’t. When a Child reaches a certain age, the mother should have to work. Even with changing to the food stamp card people are still selling them. So many are on drugs, they should be random drug testing. no notice Random visits to the home. Yes it cost money to do this but we’ll save so much on fraud

    Reply this comment
  21. J.K.
    J.K. 27 February, 2017, 11:13

    THRE IS SO MUCH WLFARE FRAUD. People should have to
    get jobs , they should be random drug testing. no notice Random visits to the home. Yes it cost money to do this but we’ll save so much on fraud . Men live with the women, but say they don’t. When a Child reaches a certain age, the mother should have to work. Even with changing to the food stamp card people are still selling or trading for drugs

    Reply this comment

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Ali MeyerBob DuttonJerry Brownwelfare reform

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