By all means yes! Prosecute the food stamp recipients engaging in fraud! It is a missing part of solving food stamp 'cash back' fraud here in Oregon. Secretary of State Dennis Richardson has issued an advisory report about food stamp fraud investigations and while it details prosecutions of retailers engaging in this fraud, it doesn't include prosecuting the other willing participants, the food stamp recipients. The full report is here.
If they were prosecuted and forced to pay back the money, the word would get out on the street quickly and the cash back fraud that allows recipients to buy banned items like alcohol and lottery tickets would stop.
An interesting note: the data about 1% fraud in EBT is 10 years old before the massive Obama administration's push for record levels of participation which has 25% of all Oregonians in the program and Oregon government receiving 15 million dollars in bonuses for signing up so many. Its hard to believe that 25% of all Oregonians need food stamps with our full employment and the economy roaring.
Research shows that nationally, its rare for EBT card recipients to actually be prosecuted or required to pay back the cash they fraudulently obtained working with a corrupt retailer. As here in Oregon, some recipients are banned for life from receiving benefits or are temporarily suspended from receiving benefits. The latter offers no real punishment that keeps them from finding the next retailer willing to engage in the fraud. The SOS report talks about restitution, but it is likely from the retailers and not the recipients.
Technically cash back is not allowed on EBT cards but is for a similar program, TAFDC. Either way, the potential for fraud and misuse is serious and must not be tolerated.
The only way to stop it cold is to prosecute the retailers and the receipients engage in this fraud.