Dolly ًR., a Holocaust survivor in her 90s, knew exactly how much was supposed to be on her food benefits card to get her through June: $224.47.
But when she tried to check out at the grocery store in Borough Park, she was in for a shock. There was nothing left on her Electronic Benefits Transfer card. Like tens of thousands of other New Yorkers, she had been a victim of fraud.
“I need the money,” she told The City Reporter the next day. “I’m not buying luxury items, I’m buying food.”
Dolly was devastated to learn, however, that EBT cardholders don’t get reimbursed for fraudulent charges, as holders of credit and debit cards do.
“What can I tell you,” she said. “Disgusting.”
When those credit and debit cards are used for unauthorized purchases, private issuers are generally on the hook for the damage. But with EBT cards, it’s the cardholder who loses.
That difference, advocates say, is one reason why the cards that dispense food benefits to 1.7 million New Yorkers have yet to receive the basic electronic security measures that commercial cards have — making them a target of organized transnational crime rings that spin federal Supplemental Nutrition Assistance Program dollars, meant to help many poor people meet basic needs, into gold for a few.
Local social service providers say the charges, which frequently wipe out accounts, seem to be surging in recent months.
Victims of this fraud turn to food pantries and gifts from friends, but getting enough to eat is a challenge. Seniors stretch out their canned goods and make meals out of what’s left in the freezer, telling themselves not to eat too much at once. A Flushing father of two teenagers hopes to satiate them with instant ramen, three for 99 cents. A six-year-old loves fruit, but her single mother, a preschool teacher, says, “I couldn’t do it for her this month.”
New York’s outdated EBT system exposes the city’s poorest to theft without recourse, The City Reporter found. State-issued EBT cards lack the security chips typically found on credit and debit cards, and there’s no fraud detection in place to catch even the most outlandish charges. A state hotline used by recipients to check balances doesn’t require verification, creating an opportunity for thieves to hijack account information.
Legislation to create a victim’s compensation fund stalled in Albany this year and money to reimburse people for the losses did not make it into the new state budget.
California provides an extraordinary counterpoint. Under state law, it replaces stolen food benefits with state money. The state swapped the old magnetic stripe cards, which are vulnerable to fraud, for chip-and-tap EBT cards early last year. Alabama now has chip cards as well. Oklahoma has also begun rolling them out, and six other states have them in the works.
EBT cards in New York, meanwhile, still look like simple gift cards, with only a magnetic stripe. The state budget this year includes money to convert to a chip-card system, but that could take months or longer.
In a statement, the Office of Temporary and Disability Assistance focused on the positive. “With the governor’s funding commitment, New York is one of just a handful of states transitioning to secure chip-based EBT card technology to help protect SNAP recipients from skimming,” spokesman Anthony Farmer wrote.
Neither that office nor Gov. Kathy Hochul’s office specified the actual amount of that funding commitment nor how long the changeover would take when asked by The City Reporter.
Maria says she had EBT food assistance money stolen from her account, May 26, 2026. Credit: Alex Krales/The City Reporter
California also put a literal astrophysicist on the case, Monica Bobra. Her team at the state’s Office of Data and Innovation partnered with its Department of Social Services to make a machine-learning-powered model for cash-assistance fraud that identifies suspicious transactions. Building on that, the state figured out how to identify likely compromised cards and get cardholders to reset their pins. It also added those three little numbers typically on the backs of cards, card verification values, to guard against scamming. As of April, California has reduced reported food and cash benefit theft by 76% relative to the 2024 peak, the state said.
New York, on the other hand, does not even keep data on people losing their benefits to fraud. The city and state stopped collecting claims after the federal government ceased reimbursing them in late 2024 and the U.S. Department of Agriculture said to stop accepting them.
“It’s not seen as a crisis, because it’s poor people,” said Joel Berg, CEO of the advocacy group Hunger Free America. “When we define something as a crisis, we address it.”
In a statement on behalf of Hochul, the governor’s office touted the chip card plans and pointed the finger at Washington, D.C. for the lack of reimbursements.
“The failure of the Trump administration and the Republican-controlled Congress to provide federally funded replacement benefits underscores their lack of regard for the millions of Americans who rely on food assistance from SNAP each month to keep their families fed and healthy,” spokesperson Jonah Allon wrote.
Roughly 20% of New York City’s population is on SNAP; half a million are children. In order to qualify, an individual generally cannot make more than 130% of the federal poverty level, which works out to about $20,000 a year. Families who pay dependent care costs, seniors and people with disabilities can make up to 200%, or less than $64,296 total for a family of four.
Across the city, social workers field daily calls from clients and neighbors whose food benefits have vanished. The nonprofit group Public Health Solutions, which helps people sign up for SNAP, heard from 23 such victims in one typical week in May.
United Neighborhood Houses, an umbrella group of community organizations, asked their affiliates how many cases they had seen last month; one small neighborhood development corporation reported 30. A supervisor at another said she gets two calls a day.
“Most told me it’s worse than it’s ever been,” said J.T. Falcone, director of development and communications at UNH.
This winter, the nonprofit Community Service Society surveyed 827 current SNAP recipients citywide. Asked if they had been a victim of this type of benefit theft in the past three years, 31% said yes.
How the Fraud Works
The theft is often referred to as “skimming,” though it usually takes more than a little off the top. Theoretically, any card might be “skimmed,” its number and pin stolen. But EBT cards are especially vulnerable because they lack now-standard chips and other fraud protections.
Hierarchical organized crime teams, originating mostly out of Eastern Europe, have learned to exploit this outdated payment system and are living large off the scam, renting $10,000 a month apartments and Lamborghinis, according to the Secret Service, which investigates counterfeit crimes. Meanwhile low-level runners help siphon the proceeds of people’s benefits up to managers and senior leaders.
Skimming pros hide gadgets on credit card machines at stores, gas pumps and ATMs, frequently unbeknownst to shop owners. The devices gather reams of card numbers and pins when people swipe, then transmit the data wirelessly or cache it for pick up. The info can then be used to generate copies of cards or change hands first, sold online to other fake card makers.
EBT cards also dispense cash assistance, extra dollars to help people with limited resources with basic expenses. Soon after midnight on days when benefits come in, the lowest-rung operators in the scheme hit ATMs to pull out whatever cash they can, said Michael Peck, Assistant Special Agent in Charge of the Secret Service’s Criminal Investigative Division.
“You’ll see the dudes show up and they’ll start blowing cards,” he said. “They’re just loading cash. You’ll see $40,000 go into these bags.”
But their individual cut is more like $150, Peck said. The real money goes to the people running the show, the cash sometimes bricked into dishwashers and shipped overseas. A million dollars, even $1.2 million can fit in a dishwasher, Peck said.
To turn SNAP benefits into cash, the groups turn to “trade-based money laundering,” also known as “fell off the back of a truck.” With the cloned cards, runners hit bulk big box stores for a pallet of Red Bull, baby formula or Snickers bars, for example, and then sell it to bars or restaurants, or send it overseas. Baby formula that is eventually re-sold can sit around in storage facilities and in the heat first, raising health concerns, Peck noted.
Or the card numbers can be used in spoofed transactions that mimic a legitimate sales terminal, using real stores’ identification numbers to siphon money directly to fraudsters’ bank accounts. Gross profits leave the country as crypto or bulk cash, the Secret Service said.
The overall scheme funnels approximately $1 billion a year from hundreds of thousands of poor Americans, with the majority of that going to a small group of top leaders, fewer than 200 people, the Secret Service said.
“I think it’s getting worse,” said Matt McCool, Special Agent in Charge for the Secret Service’s New York Field Office. ”It’s tough to get to the makers.”
In individual accounts, the racket often shows up as a series of impossible purchases, the kind that can be detected by anti-fraud measures used in other cards. In one EBT record shared with The City Reporter, a $237 benefit hit a New Yorker’s account at midnight. At 2:46 a.m., two simultaneous transactions 300 miles apart cleared the total exactly: $117.18 charged to a shop in Patterson, in Putnam County and $119.82 at a supermarket in Potsdam, near Canada. Both stores were closed at that hour.
So how did the skimmers know when the benefits would be deposited and the amount left on the card?
“They probably called the phone,” said Gitty, a single mom in Brooklyn who lost her benefits to fraud in May.
The state benefits hotline requires only card number and pin — the exact information easily extracted from secretly installed skimmers and traded en masse — in order to access transaction history, which reveals deposit dates and amounts.
Gitty, 30, a preschool teacher, relies on federal food benefits to afford staples like milk and bread.
“I really never treat my daughter,” she told The City Reporter.
But the weekend her May payment arrived, she thought she would make an exception. She took her six-year-old to Weiss Bakery in Borough Park for a Sunday morning bagel with cream cheese.
At the register, her card was declined. She had only spent $30 so far herself, she said. All the rest of the month’s food money was gone.
“I remember going out of the store and just, like, crying, you know?” she said. “Like really relying on it for the basics, and I remember feeling so lost, like, what am I gonna do?”
Some extra verification on the hotline could potentially “ruin” the scheme, one source familiar with it suggested, although law enforcement noted that skimmers tend to adapt fast to changes.
Basic Fraud Detection Missing
Besides the hotline’s vulnerability, New York’s EBT payment system lacks common fraud detection technology standard in commercial banking.
Nicholas, 31, from Queens, did not eat for a day or two, he said, after his month’s benefits were taken.
“Just drink water,” he told himself. “Water is good.”
Nicholas says he had money stolen from his EBT food assistance account, May 26, 2026. Credit: Alex Krales/The City Reporter
In April, fraudsters attempted a $314 transaction out of Chicago on his EBT card. It was rejected because he had disabled all out-of-state purchases on his account.
The next morning, his card number was used in five transactions over the course of two minutes — three in The Bronx, alternating with a try in Pennsylvania and one in Rhode Island. The three ostensibly in The Bronx all went through, wiping his account. A couple hours later, there was an attempt at a $1,112.78 purchase, supposedly from a Brooklyn address, followed by three more purchases for $345.12, $345 and $313.24 — all rejected for insufficient funds.
None of this activity appeared to prompt any response on New York’s EBT side. The features the system offers to prevent fraudulent transactions all fall to the user to execute: freezing and unfreezing a card, changing pin numbers frequently and opting out of out-of-state transactions.
There was no automatic block of a suspicious purchase or a text or call asking Nicholas if the transactions were real. New York’s EBT system has no such functions.
California does have a model for sussing out suspicious activity on EBT cards, developed by its social services department and Office of Data and Innovation. The system uses a “random forest” of decision trees to look at various factors, such as where and when a transaction occurred, to gauge whether it is real.
Bobra, the principal data scientist there, previously studied the sun, using information from NASA’s Solar Dynamics Observatory to forecast solar flares. She and her group took “kind of the same approach,” she said, to predicting benefits fraud as she might to tracking space weather.
“We’re trying to use advanced methods, use modern tools to improve the lives of Californians,” she said in an interview with The City Reporter. “And we are.”
But standard fraud protections like chip cards and models that identify suspicious activity — ubiquitous in commercial banking for years — have not been applied to EBT in New York or most of the country.
It’s not for a lack of expertise. EBT in New York is administered by the fintech giant Fidelity National Information Services, or FIS, which specializes in payments processing and employs 57,000 people across 61 countries. Fraud prevention technology is a core product, public filings show. FIS also implements mobile payments systems like Zelle for private banking — the kind of phone apps that could potentially be used for electronic benefits by New York, but are not.
FIS also administers EBT for California.
In 2022, the other bidder for the state EBT system, a company called Conduent, challenged the state’s selection of FIS for the job, saying the state should issue a new procurement request, in part to require chip cards.
“There have been public policy developments that have made it clear that magstripe-only cards need to be replaced” by chip cards in New York, they wrote, according to a determination by the state comptroller’s office.
FIS said in its response that it had the capacity to do chip cards. The state rejected Conduent’s challenge.
“It is not in the best interests of the State to reissue the procurement with revised requirements,” the state Office of Temporary and Disability Assistance contended then, according to the comptroller’s determination, “as OTDA does not possess the resources or expertise to develop a new chip enabled EBT system and federal guidance regarding the use of EBT chip cards or development of a chip enabled EBT system has not been issued.”
In the 1970s, Congress set strict liability limits for credit and debit cardholders whose numbers were used for unauthorized purchases. Now on the hook for covering fraud, card issuers developed interventions like algorithms that flag strange transactions and user notifications, according to Carla Sanchez-Adams, senior attorney at the National Consumer Law Center.
“They build in and are constantly thinking of ways to prevent fraud,” she said.
But with EBT, the consumer takes the hit. In the 1990s, the Federal Reserve moved to change government regulations to extend fraud coverage to EBT. State and local governments opposed the measure, citing the costs, according to a U.S. Government Accountability Office report, and Congress then explicitly cut EBT systems out of the protections given to private card users.
“If there are no incentives in place, because, ‘Oh, well, you know, you lost it, too bad, so sad for you,’ then they don’t have any incentive to spend money on the infrastructure to make them safer,” Sanchez-Adams said.
Not Seen as a Crisis
Skimming has been on the rise for several years, and in 2022, the federal government began funding reimbursements for people who had lost their benefits. But Congress did not renew them, and they ended in late December 2024.
That year, when SNAP fraud was reimbursed and the city was taking claims, New York City’s Department of Social Services received an average of roughly 7,000 a month; more than 86,000 claims that year, amounting to just shy of $45 million in total. The department stresses that this is surely an undercount, since some people did not report the crime.
But to compare the magnitude of the current problem to years past is impossible, because once the feds stopped reimbursing, the city and state stopped collecting claims — and thus, counting.
The city still collects claims for cash assistance skimming, which is reimbursed by the state; April saw the highest number in a year. SNAP and cash assistance are loaded on to the same card–though far more people get SNAP than cash assistance–and the two typically trend together.
A state bill proposed to compensate victims of skimming with state money sponsored by Brooklyn State Sen. Zellnor Myrie passed the senate finance committee this year, but then stalled before going to the full senate for a vote.
The City Reporter asked NYC’s Department of Consumer and Worker Protection if it had looked into store-side measures to prevent skimming, such as stickers for sales terminals that can reveal tampering.
“We do not deal with this type of scam,” a spokesperson for DCWP replied.
There’s nothing much to offer people who lose their benefits, said Ailin Liu, a program director at Public Health Solutions. No emergency fund or private charity that replaces the lost benefits when people lose it, “nothing like that to point people to.”
“It’s devastating,” Liu said. “And the fact that it’s been ongoing for how many years now? For three, four years now, and it’s still ongoing? It hurts to hear that again and again.”
Long Ho, coordinator at LiveOn NY, which serves seniors, is the person at the other end of the line when clients call for help. They’ve sometimes filed police reports, thinking that will help them make a claim somewhere.
“A lot of clients are under the impression that they can get reimbursed, and unfortunately we are the ones who have to tell them that that’s not going to happen, you know, so it’s a very difficult conversation to have,” he told The City Reporter.
Food pantries and soup kitchens help in a crisis, the boxes or bags of food, helpful as they are, represent only a fraction of what SNAP can buy.
At St. John’s Bread & Life in Bedford-Stuyvesant, guests are able to choose 10 grocery items from the pantry and sometimes, if there’s enough, a bonus item or two. The supply is meant to last people at least three days, and people can pick up there every two weeks. For the in-between times, staff suggests other pantries, urging people to call ahead in case they are closed or out of food.
Workers distribute food at the St. John’s Bread and Life pantry in Bed-Stuy provided fresh produce, May 26, 2026. Credit: Alex Krales/The City Reporter
Sister Caroline Tweedy, St. John’s executive director, said the urgent needs caused by skimming have gone unresolved because of who it affects.
“It’s because of the population being served, you know. They’re poor people who don’t have a voice,” she told The City Reporter. “So, they kind of brush off to the side and say, ‘Oh, well, you know, sorry.’”
A 67-year-old grandmother in Rego Park, Queens, was initially reluctant to sign up for SNAP after retiring from work at a day care.
“I just had never wanted to end up, you know, in the state, in a situation, to have to receive this, you know,” said the woman, who asked that her name not be used to protect her privacy. “I wanted to be my own individual independent woman. But it reached a point where I have to.”
When she finally signed up for SNAP last fall, she found great relief. By April, she had grown accustomed to buying healthy food that she liked to cook.
“The money I get, I’m so thankful,” she said. “It goes a long way with budgeting everything for the month and it helps me so much.”
She knew her month’s deposit came in on a Monday, but she did not plan to shop right then. A few days later, about to go to the market for fish and vegetables, she checked the state’s online portal and saw 16 cents in her account.
“I was shocked, I was taken aback,” she said. “I wanted to cry, but I said, Maybe it’s a mistake, let me call.”
It was not. Her account showed her regular $298 monthly deposit on April 13.
That very same day, six purchases spanning the state that completely drained her account. There was $58.95 supposedly spent at the address of an Amish market five hours north of the city. Another $53.56 at a country store about 20 miles from the Canadian border.
Had a person actually visited each one, from The Bronx to Westchester to Rochester, up north and back down to Scotia, New York, the trip would total a more than 900 mile loop.
She, meanwhile, could barely make it to the closest food pantry with her cart, her leg pain was so bad.
She was told to change her pin. She tried to make the canned food she had last and finish anything in the freezer.
“Don’t snack too much or don’t eat too much of this, let it go for the next day, you know,” she thought. “Just to let it be enough for the time.”
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