Ironically, most of the fraud occurs through states and not Uncle Sam. Uncle Sam has tons of investigators who could investigate these frauds, but instead there is a small group of state investigators who look at things like this - not federal. They don’t usually get involved.
If people had any clue about how much fraud is perpetrated against the taxpayers in the US their heads would explode. It was one of the things I really wish Trump had made a priority in his first term. Medicaid, daycare, eldercare, Medicare, tax refunds, food stamps, section 8 housing, and the list goes on and on. We are talking hundreds of billions of dollars. It is that big.
While generally true states issue the benefits, so ultimately are the ones allowing the benefit fraud, and states have limited staffing for benefit investigation, USDOL and USDOJ are the main investigators for big benefit fraudsters. States focus on mid and lower tier crooks.
Also, there are a lot of benefit claw backs, where people inflate their reported wages, only to end up having no proof or being discredited...
The collection actions, penalties and interest, can be devastating...once enacted, because it’s mostly automated, and the benefit recipient is mainly battling software.
So the individual might have felt good on the front end getting an extra couple thousand a month, that they didn’t deserve...but will end up getting wiped out in the claw back process...
It’s brutal.
Food Stamps are a second currency in America. They’re traded for half their face value in the ‘hood for drugs.