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If you've ever lost your debit or credit card, you know that getting a replacement from the bank can be a huge hassle. But the KING 5 Investigators have found the state of Washington makes it easy -- too easy -- to replace state-issued debit cards loaded with taxpayer money.

They found the welfare debit cards are like a golden ticket for cash and they are being sold on the streets and even on Craigslist.

A series of recent Craigslist postings advertised three months worth of food stamps for sale. That is $600 worth of food stamps for as little as $100. The benefits are loaded onto an electronic benefit transfer, or EBT card, each month.

The sale of those stamps is a felony. But Allen Jones didn t make it much of a secret.

Jones is the man who answered our email response to the ad. The 23-year-old jobless man invited us to the Mukilteo address where he lives with his mother. KING 5 didn t buy the EBT card that he pulled out of his pocket, but the Investigators did confirm the card is valid.

What s this? Jones asked, when approached by a KING 5 news crew. He retreated into his mother s house and refused to answer questions.

But his card does all the talking. The number 1070 on the front of the cardsmeans it's a replacement issued after he reported the original lost or stolen.

How the scheme works

Replacing the card is key for a scheme like Jones to work. He can sell the card, wait until the buyer has used up the agreed upon amount of benefits, and then he can order a new card. He has a brand new card to sell again.

It's frustrating. It s very frustrating, Department of Social and Health Services Assistant Secretary Troy Hutson said. It makes me angry. These programs are for people in vulnerable situations.

Hutson runs the food and cash welfare programs for DSHS. He doesn't deny his program is part of the problem.

Clients can visit DSHS offices and get new EBT cards issued on the spot, with no questions asked.

A lot of things we did were driven by giving good service to the clients and making it convenient for them, Hutson said.

By the numbers

KING 5 obtained state records showing tens of thousands of clients received replacement EBT cards each month.

Analysis shows that DSHS offices replaced an average 27,000 EBT cards each month last year.

More than 20,000 clients had their cards replaced three times or more last year.
87 clients had their cards replaced almost every month, 20 or more times, in two years.

We should really not be allowing people to have multiple cards in a year, said Hutson.

Drug detectives say EBT cards are currency on the street and they are handed over to dealers in exchange for drugs. After a deal, the drug user visits a DSHS office to get a new card.

Through our source information, it's happening very regularly, very frequently, Lakewood Police Department Sgt. Steve Parr said. He adds that officers often find drug suspects carrying multiple EBT cards.

Dealers don t have any problem finding unscrupulous merchants who pay cash for food stamps.

It's a bit frustrating and disheartening that the state's wasting as much money as they are like this, Sgt. Parr said. Our tax money's being spent to purchase drugs.

Warnings ignored

DSHS got a high level warning about the growing problem but did nothing.

You can pick up an EBT card (and) it doesn t have your name or picture on it. You can just sell it, said Rep. Troy Kelley, D-Tacoma. It's a real problem.

In 2009, Rep. Kelley learned the cards were openly for sale on a Tacoma street corner.

He asked DSHS why the only security feature is a PIN, making it easy for anyone to use the card.

I brought up, I think, some pretty good solutions and they told me they wouldn t work, like putting a picture on the card. That would cut down on the fraud tremendously, Kelley said.

Another solid tip to DSHS came from another Washington lawmaker. Senator Andy Hill, R-Redmond, learned from a constituent about the ads on Craigslist and reported it to state investigators. A few weeks later DSHS told Sen. Hill its investigators couldn't crack the Craigslist case. Then, Hill learned KING 5 had located the ad s author.

The fact that a humble reporter can go off and get a lot farther than our investigators, it's embarrassing and unacceptable, Hill said. My concern is how they are responding to an elected official and I shudder to think how they respond to a regular citizen.

Not well, according to state records. Citizen complaints of EBT fraud peaked in 2009 with 148 cases of fraud or abuse reported. But DSHS s own internal records show a mere four percent of those complaints resulted in penalties against the cardholder.

Real results

Clearly it means that we have huge opportunities for improvement, Hutson said of DSHS s inability to solve the Craigslist caper.

In light of KING 5 s investigation, DSHS is making changes to its EBT card replacement policies. The department says it will put a limit on the number of times cards can be replaced for each client in a given year. The department will also allow the vendor that handles the account, Chase Bank, to issue replacement instead of workers at DSHS offices.

DSHS says it has now assigned a criminal investigator to work on the case of Allen Jones, the man who was selling his food stamps on Craigslist.

This story is part of our continuing series Their Crime, Your Dime that has documented millions of taxdollars wasted in the federal welfare program. You'll find more stories in the series here.

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