KCTV5 dug through hundreds of thousands of state records to see if a new Missouri law, passed in part because of a previous investigation, is preventing wasteful spending of welfare money meant for the needy.
Missouri's Temporary Assistance for Needy Families or TANF program is supported by tax dollars. A law that went into effect Aug. 28, 2013 was supposed to curb the misuse of the benefits to ensure the money makes it the right people.
Republican state senator Will Kraus of Lee's Summit, MO, pushed through the new law making it illegal for Missouri EBT cards to be used at liquor stores, strip clubs and casinos.
"These are taxpayer dollars that we want to be used for kids," Kraus said.
According to state records obtained by KCTV5; $7,995,442 was accessed in more than 123,000 TANF transactions in nearly a month under those new rules.
The records reveal nearly 200 transactions taking place at stores with names that included the word "liquor" in the metro, around the state and across the country. Cards were also used at casinos in Oklahoma, St. Louis and Kansas City, KS. Some of the tax dollars were even cashed out at a strip club in Springfield, MO.
Kraus was not surprised to hear about the transactions so soon after the law went into effect.
"It takes time to implement any new law," he said.
And Kraus remains confident that when the state starts handing out fines and jail time to those caught cashing out at the wrong places, the bad transactions will cease.
"As punishments come in, as they are having to repay this money before they get additional money, this is going to send a signal. They are going to stop using it incorrectly," he said.
Another part of Kraus' law holds business owners liable for any illegal EBT transactions that happen on their premises, including ATM withdrawals.
Sayed Mohammed Asif, the owner of a midtown Kansas City convenience store, was unaware of that particular restriction.
"I didn't know about ATM. That's something new," Asif said.
"You had no idea?" KCTV5 Investigative Reporter Eric Chaloux asked.
"I had no idea," Asif responded. "I don't think we should be fined. If it's prohibited, it should be prohibited automatically from card to try to use at machine where it's not allowed. That is very difficult for us to stop."
Despite Asif's surprise, the website for Missouri's Department of Social Services or DSS does have a clear warning for retailers about the changes and even a sign they can print and post.
Enforcing fines against retailers will be in the hands of local prosecutors, not the DSS. Prosecuting attorneys will make the final decision on whether to file criminal charges against businesses.
DSS will be in charge of punishing clients who commit fraud. According to the agency's communications director, Rebecca Woelfel, there is already a process in place to handle these claims.
In a written statement, Woelfel explained that, "If the claim should be established, the amount of the transaction will be entered as an ineligible payment in the Claims and Restitution tracking system. The participant will be notified and provided hearing rights. If there is no hearing or the agency is affirmed at the hearing repayment arrangements will be made; which could include a reduction of future Temporary Assistance payments."
DSS is expected to submit a report to the governor and legislature by Dec. 1 explaining the methods it will use to detect fraud and how much that will cost.
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