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Food stamp recipients selling benefits for cash

PHOENIX (CBS5) -

The man in the gold Lexus thought he was meeting a buyer in the parking lot of an east Valley supermarket. He was there to sell food stamps, now known as Nutrition Assistance in Arizona, for 60 cents on the dollar. He said he had $3,000 worth.

"I just swipe the card," the man told an undercover CBS 5 News producer. "We just pretend like we're together. They don't check ID or anything."

Before they made it into the supermarket, CBS 5 Investigates confronted the seller. He said he knew what he was doing was illegal, but his mother needed the cash.

In Arizona, Nutrition Assistance recipients no longer receive the old paper coupons that were used for decades. They are now given what look like credit cards, which can be used for specific food items. The cards cannot be swiped for cash, but that hasn't stopped some recipients from getting creative.

CBS 5 News found people selling their food stamp benefits on Craigslist. The going rate was 50 to 60 cents on the dollar. Most people were selling between $100 and $200 worth of benefits. The man in the Lexus was selling the largest amount.

"Absolutely, it is a crime," said Marcus Hambrick. He is the chief accountability officer at the Arizona Department of Economic Security.

Hambrick has a team of investigators whose job it is to identify food stamp fraud and make arrests. He said the tactics constantly change, but was not surprised at what CBS 5 News found.

Hambrick said his investigators rely on their own research, statistical analysis of food assistance card use, as well as tips from people in the community.

Stories like this one are fueling an effort in Congress to cut funding for food stamps by nearly $40 billion. People who legitimately rely on the program worry that they'll lose an irreplaceable tool to put food on the table. Right now, more than 1.1 million people in Arizona receive nutrition assistance.

"It was very beneficial to me. It helped a whole lot," said Dorthea Hogan, who received food stamp benefits for three years while she was unemployed and homeless.

She now has a full-time job, but says she never would have made it through the lean years without food stamps to help feed her family.

"When I didn't have any money, I could go to Circle K and buy food," said Hogan.

Other people purchase food stamps from sellers as a way to make ends meet. One woman agreed to describe the process if CBS 5 News agreed to conceal her identity.

"I give them the money, 50 cents on the dollar, and they give me their PIN number and I go shopping," she said.

"I know it's wrong. And I won't stop, because I have to feed my kids," she said.

[RELATED: Report fraud to AZ Dept. of Economic Security]

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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