Unauthorized Withdrawals Drain Californians of $181 Million

(UnitedHeadlines.com) – Seven people were arrested after almost $200 million was stolen from the Electronic Benefit Transfer (EBT) accounts of low-income families in California.

Between June 2022 and February 2024, the seven suspects exploited security vulnerabilities and illegally accessed funds, primarily through unauthorized ATM withdrawals, according to the Department of Justice.

The suspects allegedly gained access to the EBT information by installing skimming devices, which is when a card reader is disguised in point-of-sale terminals or ATMs, across various locations, capturing the account information when people unknowingly used their cards at a location with a skimmer. According to the Department of Justice, the suspects used the information stolen from the EBT cards, cloning it onto the magnetic strips of other cards they used to make withdrawals and purchases. The Department of Justice indicated that the suspects were part of an organized criminal network that operated with the specific intent to defraud California’s EBT system.

In a statement, U.S. Attorney Tara McGrath said the fraud involving EBT accounts “literally takes food” from children’s mouths. She said that parents purchasing food for their children are unaware their “EBT cards have been wiped clean” until they reach the checkout aisle of the grocery store. She added that authorities will focus on taking proactive steps to help “prevent this appalling crime,” adding that those who take advantage of “vulnerable people” will be punished.

According to data from the U.S. Department of Agriculture, California is one of the top states for EBT use in the U.S., leading the country in the number of benefits distributed and the volume of transactions. Households must have a gross monthly income at or below 200 percent of the Federal Poverty Level to qualify for the EBT program. In 2023, nearly 5.1 million California residents received $14.5 billion in EBT benefits, which amounts to an average monthly benefit of $185 per recipient.