Those cards may be “pre-loaded” with money, but I would assume each is hooked to some account number, thereby identifying the user of each card. How hard could it possibly be to figure out who was misusing their card?
Not hard at all except that California, in their infinite wisdom, only investigates accounts that have been used out of state for anywhere from 30-90 consecutive days. Who the hell vacations in Vegas for a month? Hawaii for three months? Withdrawing money from an ATM in Vegas on Saturday and Sunday and you're back in California on Monday won't trigger an investigation.
In their further infinite wisdom, investigations are hobbled by the fact that California decided to save the state money by laying off the state employees whose job it was to investigate welfare fraud.