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SEATTLE-- For many years crooks have had an easy time cheating the state's largest agency. That's the finding of a new report ordered after a series of KING 5 investigations.

The report s author says taxpayers lost at least tens of millions of dollars each year because of an extreme lack of oversight by the Department of Social and Health Services.

How bad is it?

Former United States Attorney Jim McDevitt says DSHS left fraud unchecked for years if not decades.

As a taxpayer I was incensed. As a former prosecutor I was disappointed, said McDevitt, who just completed a two-month independent investigation of the agency.

The Department of Social and Health Services has its own fraud unit but McDevitt says investigators were hampered by DSHS upper management.

Even when a criminal case or a fraud case looked to be obvious there were those in the department who were trying to figure out how not to prosecute the case, said McDevitt.

McDevitt says that s discouraging given DSHS s size and the commitment from taxpayers. The agency has an approximately $2 billion yearly budget and it screens social services programs for the elderly and disabled, food stamps, cash assistance for the poor and daycare. The report singles out DSHS manager s caregiver mentality.

I'm not demeaning that at all. That is, they want to take care of people, said McDevitt. But you have to realize, even the caregivers have to realize, that in any program like this, when benefits are so easy to get, with a lack of enforcement, there is going to be fraud.

According to McDevitt, managers cut back the fraud unit s staff and funding over the course of many years and led by fear, intimidation, a culture of disrespect.

This explains why the KING 5 Investigators have documented so much fraud over the past year in their series Their Crime, Your Dime.

  • They found DSHS clients selling food stamps openly for cash, even on Craigslist.
  • They found merchants buying them for half price and doubling their money when the stamps are redeemed.

They reported on 13,000 clients who withdrew their welfare cash last year at ATM s inside casinos, something one DSHS official initially shrugged off.

I don't know if someone who is withdrawing money at a casino is actually using it to gamble, said Assistant DSHS Secretary Troy Hutson to KING 5 in September of last year.

Big changes

Hutson, who headed DSHS economic services division, resigned as the stories continued.

DSHS Secretary Susan Dreyfus ordered an overhaul of the fraud unit, including the review by McDevitt.

McDevitt believes taxpayers paid dearly for DSHS s lack of oversight.

I will tell you it's way north of tens of millions of dollars per year, probably, he said of the yearly losses from fraud.

Former Franklin County prosecutor Steve Lowe has been hired to lead DSHS s new Office of Fraud and Accountability.

I've got some work to do, Lowe said. He s hiring more investigators and ordering new equipment.

During the new unit s first sting operation last month, Lowe found out that investigators didn t even have a video camera to tape a transaction with a woman who was trying to sell her food stamps on Facebook.

Lowe was stunned that the fraud unit didn t have the most basic equipment needed for law enforcement, including cameras.

The best evidence is video evidence. It is really strong and compelling to a jury, said Lowe.

McDevitt s report also includes some recommendations he acknowledges are controversial. He recommends drug tests for all welfare recipients and benefit providers, like daycare providers, who are paid by the state. He also recommends increasing efforts to find illegal immigrants who are receiving benefits and kicking them off taxpayer-funded programs.

How to report welfare fraud

The Office of Fraud and Accountability (OFA) investigates Welfare Fraud in the state of Washington. The word Welfare is used to include: Public Assistance programs and benefits; food stamps; Temporary Assistance for Needy Families (TANF); Quest card, which is used for Electronic Benefits Transfer (EBT); and Childcare benefits.

Washington State Welfare Fraud Hotline: 1-800-562-6906

How to report child and adult abuse or neglect


If you need to report either of these issues, PLEASE call 1-866-ENDHARM (1-866-363-4276) (DSHS Referral Line).

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