Local Assemblyman wants to stop welfare fraud through new bill - NEWS10 ABC: Albany, New York News, Weather, Sports

Local Assemblyman seeks to stop welfare fraud

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ALBANY, N.Y. - A local Assemblyman is supporting a new bill that would prevent welfare recipients from cashing in at places like liquor stores and strip clubs.

It is money that is supposed to be used on essentials, but instead Assemblyman Steve McLaughlin says some welfare recipients with electronic benefit transfer cards are withdrawing cash at places like liquor stores, casinos, and strip clubs.

"It's an insult to the taxpayers of this state that are footing the bill and just got hit with their own tax increase," McLaughlin explained, "everyone's paycheck went down by about two percent."

Electronic Bank Transfer cards work like debit cards, you can withdraw cash from most ATMs that will accept the card. The "Public Assistance Integrity Act" which McLaughlin wants to pass would prevent the ATMs at those establishments from accepting the EBT card.

Mark Dunlea with the Hunger Action Network says the problem is more complicated than that.

"Just because you have statistics that show you have redeemed at an ATM does not mean you have spent the money there," he said.

Liquor store owners say other loopholes would still remain. "If they want to drink or go to a strip club they'll go to another ATM. It won't stop people one bit," said Craig Allen, of All Star Wine and Spirits.

McLaughlin rebuttals saying, "They can still do that, but we shouldn't make it that easy for them."

"I would think a better solution is to make the establishment responsible for that," suggested Dunlea.

McLaughlin says if the state doesn't figure out a way to stop the welfare abuse it could lose $120 million in federal funding in 2014.

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