Thanksgiving was stolen from this mom; a taxpayer hacking scandal was revealed

Imagine loading up your shopping cart on Thanksgiving week, strolling to the checkout counter with a buggy packed with stuffing, turkey, cranberry sauce, apple pies....only to be told by the store clerk that your card won't work. Crying baby in one arm, smartphone in one hand, you are ushered to the service desk where it becomes clear that your account has been hacked. You can't buy Thanksgiving dinner after all.

"I’m standing there with all this food, my baby in the carriage, just freaked out, embarrassed, upset. I don’t understand what’s happening," said Georgete Papadimitrios, who endured that scene last Thanksgiving. We tell her story in this week's The Perfect Scam episode.

Holiday heartstrings aside, Papadimitrios soon discovered she had a much bigger problem. She's a single mom with a heart condition that limits her ability to work, and relies on SNAP benefits to feed her family. But in November of last year, a criminal was able to spend her SNAP benefits before she was. Her account was hacked. It happened twice more in the next few months, each time leaving Papadimitrios scrambling to feed her kids. Now, she races to the store the minute SNAP funds hit her account, hoping to spend them before criminals do.

One story of SNAP hacking is frustrating enough, but wait until you hear the rest of this story. Criminals are systematically raiding SNAP accounts all around the country. It's gotten so bad that Congress had to authorize a reimbursement fund, which the USDA tracks on this website. As of this month, $150 million has been refunded to 300,000 families since 2023. That's $150 million meant to feed hungry kids or struggling elderly Americans -- stolen by organized criminals. No doubt, the real amount is much higher, given that some victims don't report the losses.

Also, victim disputes aren't handled the way traditional bank fraud disputes are handled. There are no immediate provisional "refunds," akin to those granted to victims of debit or ATM card hacks. Yes, Papadimitrios eventually got her missing benefits, but it took a month. And a month is a long time for a family living month-to-month.

Believe it or not, there's even more frustration in this tale. A simple fix would end most of this fraud, but bureaucratic delays have so far delayed this fix.

That means U.S. taxpayer dollars are being stolen, dollars meant to feed the hungry, right on this very Thanksgiving Day.

SNAP benefits are distributed on plastic cards that look like credit cards, but are actually called EBT cards. Unlike modern credit and debit cards, these EBT have no fraud-preventing EMV chips. They use old-fashioned magnetic stripes instead. Mag stripe cards are easy to clone; criminals have been doing that for decades. And now that nearly all other card stock in the U.S. has chips, SNAP cards are easy picking for card cloners. Criminals who skim SNAP card data can embed that information on clone cards and spend down accounts. Or, they can pay off an insider to steal such data and commit fraud en masse.

Tales of SNAP fraud are maddening. In October, the Department of Justice arrested 17 people, alleging they had stolen $2.4 million in benefits.

"The money was used "to purchase large quantities of infant formula, energy drinks, and other SNAP-eligible nonperishable food items from grocery stores in Oregon, Washington, and California, and through websites associated with grocery stores offering curbside pickup," the DOJ said. "Over the course of the conspiracy, the group purchased more than 120,000 pounds of goods and stored them at residential properties and storage units in Oregon and Washington until they were packaged and transported to California in private vehicles or via commercial carriers."

In other words, the crime is rampant. And shameful. A benefits counselor named Millie Gonzalez in New York City reached out to us at The Perfect Scam podcast because she's seen endless examples in her office. For this episode, she told us the story of a home-bound 87-year-old client who'd had her benefits stolen. She also shared this disturbing pattern: Benefits seem to be drained the very moment they are loaded into recipients' accounts. The criminals really are working the system.

Sure, it'll cost some money to modernize SNAP benefits. But it must happen. It's just a matter of political and bureaucratic will. It's a shame to think the stigma attached to what used to be known as food stamps might be adding to the delays, costing all of us some tax money and costing some of us the ability to feed the family.

As you sit down to enjoy Thanksgiving dinner this week, spare a thought for those who are struggling. And count your blessings, whatever they are.

Happy Thanksgiving!