Before the hearing even began, Megan Smith felt discouraged.

An employee from the Maryland Department of Human Services had called her earlier that day and encouraged her not to bother. It would be difficult, if not impossible, to recover her stolen SNAP benefits.

“Basically what she’s saying is that nothing can be done about this whole situation,” Smith told Maryland Administrative Law Judge Daniel Andrews.

Andrews agreed: “She’s not misrepresenting the law. If you want to withdraw your hearing request, I’ll accept that.”

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“Actually, no,” Smith said. Despite everything, she wanted to move forward.

A last hope

Weeks prior, Smith had over $850 in SNAP benefits stolen from her. Her family couldn’t buy food for that month and rationed the little they had left. She and her husband had to borrow money to pay for food for their son’s birthday party.

When she reported the theft to DHS, the state agency refused to reimburse her family. Smith took the only option available — she appealed through the Office of Administrative Hearings. And that’s how Smith found herself on the phone for a telephone hearing with Andrews.

These hearings are a last resort for the thousands of Marylanders who have had their benefits stolen amid a nationwide rise in welfare theft.

And so far, unlike other states, Maryland has not reimbursed victims except in the narrowest of circumstances — if the theft continues after it was reported or if it was caused by an error of the state. From February 2022 to September 2022, when benefits theft was on the rise, only two victims were reimbursed through the appeal process, according to records obtained by The Baltimore Banner.

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Office of Administrative Hearings Director of Operations John J. Leidig said that while the agency cannot comment on the specifics of Smith’s case, the department is bound to existing federal and state policy. Federal law prohibits states from using federal funds to reimburse victims.

There have been some recent efforts federally to reimburse theft victims. Last week, Congress passed a provision in its omnibus spending bill that would require states to reissue stolen food assistance. Yet, this proposed policy only affects funds stolen from Oct. 1, 2022 to Sept. 30, 2024 — which wouldn’t apply to Smith because her benefits were stolen in August 2022. Last month, Maryland U.S. Rep. C. A. “Dutch” Ruppersberger proposed a similar bill to Congress that would indefinitely enable states to reissue stolen food assistance with federal funds.

“We’re stuck with the unfairness to you”

The Banner obtained a recording of Smith’s hearing, which provides an inside look into how the state deliberates benefits theft reimbursement.

On the phone, Andrews began the hearing by stating its purpose, whether to uphold the DHS decision to deny Smith’s reimbursement. He then explained that each party would make their case, and a written decision would be issued within 60 days.

Normally, in a formal hearing process, Smith would give her testimony and enter exhibits for the judge to consider first.

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“But we’re going to tweak it so it works a little bit more efficient for us,” Andrews said.

Instead, Andrews said, the DHS appeals representative would go first and Smith could respond with her own testimony and questions.

“Do you understand that, ma’am?” Andrews asked.

“Kind of,” Smith responded.

Unlike in criminal cases, the OAH does not provide lawyers for appellants like Smith, who cannot afford one. Instead, she was pleading her own case under oath and penalty for perjury, responsible for “bearing the burden of proof” by “a preponderance of evidence” — terms Smith didn’t understand and hadn’t heard before.

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The DHS Appeals Representative Raiketia Estep opened her testimony by providing the facts of the case: Ms. Smith filed a report with DHS stating her SNAP benefits had been stolen. The agency then reviewed her claim and found her benefits had been used out of state on Aug. 20.

Estep continued that, after Smith reported the theft, DHS promptly issued her a new benefits card. She then stated something Smith had heard many times before: Because the federal government does not allow states to replace SNAP benefits with federal funds, DHS has similarly decided not to reimburse her. It was then Smith’s turn to respond.

“Looking at all the documents that I have, and then what she has, I don’t understand,” Smith said. Her records showed that the stolen funds were used in-state in Glen Burnie, Maryland. Smith said she’d sent this information to DHS already.

“You know what, it’s not so much the location,” Andrews said. “Do you agree those $867 were taken off your card?”

“Yes,” Smith said.

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Andrews confirmed with Smith that she’d filed a report both with DHS and her local police department. Then, he referenced the federal law and an April 5, 2022 memo from DHS stating the agency would not reimburse stolen benefits unless the theft continued after it was reported.

“I literally don’t understand that whole process,” Smith said.

“How can someone make a transaction without even having my card?” she added.

Andrews said he also didn’t know. He said hypothetically someone named Megan Smith — but not actually her because “I know you’re a good person” — could share her PIN number and card information with someone else.

“No,” Megan said.

Andrews cut her off and continued. This hypothetical Smith could then sell the card to a third party and get paid some money in return. Because of this, Andrews said, it’s hard to “truly investigate” these cases. The only solution legally, he added, would be for Maryland to change its laws and allow reimbursement.

“In the meantime, we’re stuck with the unfairness to you,” he said.

Smith went on to explain that she had the receipts of one of the fraudulent purchases. It showed that $384 of baby formula was purchased at a Glen Burnie Walmart, where they usually limit the amount of formula customers can buy in one purchase . She’d also seen social media posts of fraudsters cloning benefits information onto gift cards.

How was this all even possible, she asked? Andrews said that perhaps the stores themselves could be culpable as well.

“I just wish that …” Smith started. Andrews cut her off.

He said that if there is a transactional history that the stores are helping perpetuate fraud, hopefully that can be corrected one day. And that, hopefully, one day, Smith herself wouldn’t need food assistance anymore.

“I know it’s not the best thing to have to rely on this type of support,” Andrews said. “But maybe it’s okay, if you are and you stay on for as long as you need,””

“And I’m sure you want an opportunity in life where you don’t have to do it, either,” Andrews added.

Smith tried to speak again, but Andrews stopped her. He said he didn’t think there was much more to say.

“So I’m going to end the record so I can proceed with the rest of the hearings we have to do today. Okay, Miss Smith?” Andrews said.

“Okay,” Smith said. The call ended.

Weeks later, Smith received a letter in the mail. Andrews upheld the DHS decision. She wouldn’t get her benefits back.

Brenna Smith is an investigative reporter for the Baltimore Banner.

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