What do a university professor, a celebrity barber and a professional football player have in common?
All three bought new, six-figure luxury sports cars and lived lavish lifestyles — while collecting food stamps.
How on earth can these “welfare recipients” purchase high-end vehicles while remaining on the dole?
Thanks to a federal loophole known as Broad-Based Categorical Eligibility.
The Clinton administration manufactured this loophole, and the Obama administration supercharged it.
Currently, 43 states and Washington, DC, use BBCE to bypass federal Supplemental Nutrition Assistance Program eligibility limits on income, assets or both.
The mechanism, based on a federal law that was meant to minimize states’ administrative costs, is simple.
State welfare agencies print up a brochure about welfare programs, or set up an informational hotline, and deem it a “benefit” under the Temporary Assistance for Needy Families program.
Anyone who touches that pamphlet or receives the phone number is then treated as being “categorically eligible” for food stamps — even millionaires.
It’s fraud by design that distributes benefits intended for the truly needy to otherwise ineligible individuals, under the insidious goal of maximizing enrollment and dependency — and it works in almost every state.
Researchers from the Foundation for Government Accountability examined de-identified data on food-stamp enrollment in a single representative state.
The dataset matched recipients with jobs, addresses, car registrations and more, then redacted personal details before the researchers’ review.
SNAP enrollees in this one state alone bought more than 14,000 new luxury vehicles, including Maseratis, Ferraris and Bentleys.
In that same state, more than one in five enrollees had no successful identity match at the address on their application.
Hundreds of thousands had more recent verifiable addresses in other states, and tens of thousands had no record of ever living in the state they claimed benefits in.
Thousands used Social Security numbers that federal databases could not verify.
That included real numbers with mismatched names and birthdays, numbers issued years before the applicant’s date of birth, numbers of people who died years ago, and numbers that don’t even exist.
All are clear signs that both stolen identities and synthetic identities are being used to defraud the system.
The BBCE loophole doesn’t just expand enrollment, it creates the conditions for outright criminals to flourish.
When state agencies eliminate asset checks, they tear out the tripwires that catch fraudulent applications.
States aiming to maximize enrollment have left commonsense program-integrity procedures — like data cross-checks and identity verification — by the wayside.
A stolen identity clears intake; a synthetic application sails through.
Case in point: The wealthy professor, barber and professional athlete FGA researchers spotted could be victims of identity fraud, because SNAP intentionally allows anything to serve as proof of identity — even a library card.
If states were cross-checking income and assets, those cases would be flagged as potential fraud.
Thousands more food-stamp recipients in our study enrolled using IP addresses traced to foreign countries, including China, Mexico and Canada.
More than 5,000 applicants in this state used foreign-based email addresses to apply, and countless others used “disposable” emails, the kind designed for identity theft and phishing.
A foreign fraudster with a disposable email can sign up for welfare faster than you can get through to the IRS helpline.
Those applications should not have survived a functioning intake process — but state bureaucrats chose to strip those processes to the bone.
They removed the verification architecture that would catch criminals, and in state after state, criminals responded.
USDA puts improper food-stamp payments at $10.4 billion a year, more than one in every 10 dollars spent on the program.
And that’s not even counting low-dollar errors, food-stamp trafficking schemes, retailer fraud and other intentional program violations.
States have tolerated this for decades because the federal government covered the fraudulent losses.
But now President Donald Trump’s reconciliation law ends that arrangement.
Under 2025’s One Big Beautiful Bill Act, states with high food-stamp error rates will for the first time face steep federal penalties for their inaction.
Ending the BBCE loophole will move millions of ineligible enrollees off the program and save taxpayers more than $100 billion over the next decade.
Rebuilding verification infrastructure like data cross-matches, identity checks and residency confirmation will finally give caseworkers the ability to catch EBT fraud before the benefits ever go out the door.
State policymakers should take immediate action to preserve resources for the truly needy — not for foreign fraudsters and Maserati millionaires.
The status quo now carries a price tag that lands on your governor’s desk.
Hayden Dublois is data and analytics director at the Foundation for Government Accountability. Andrew McClenahan is a board member of the United Council on Welfare Fraud.
This story originally appeared on NYPost
