The memory from the grocery store still stings more than six months later.

Vanessa Fleeton kept her eyes trained straight ahead as the line behind her kept growing and her card kept being declined — soon realizing almost $2,500 in food assistance had been stolen from her.

When the Department of Human Services approved her claim for reimbursement the next week, she was initially relieved. But that quickly gave way to fear and panic when the agency refunded only $46, less than 2% of the theft.

The Maryland social services agency has been shortchanging welfare theft victims like Fleeton for months, according to advocates and policy experts, violating state law and potentially saving millions, an investigation by The Baltimore Banner found.

As benefits theft rose nationwide, the state agency, lawmakers and advocates heard from victims struggling to make ends meet. At first, there was no state or federal law mandating reimbursement for benefits theft. People were going hungry, their bills left unpaid. Debt mounted.

Federal and state lawmakers each passed legislation to replace stolen benefits. Congress set a two-month maximum and deadlines for replacements using federal funds. A newly passed Maryland law did away with those restrictions in favor of full reimbursement, filling gaps using a combination of state and federal funds.

It’s hard to say how much benefit money has been reported stolen in Maryland. DHS officials would provide dollar figures only for claims it said it verified were stolen. Those figures were much lower than those included in internal emails.

DHS said it had reimbursed about $17 million as of Dec. 8 and denied reimbursements for $1.3 million in funds it verified was stolen, but the problem may be bigger.

Internal DHS emails reviewed by The Banner from Aug. 22 said $18.3 million in benefits had been reported stolen in 2023. Data DHS shared with The Banner as this story was about to publish shows the department verified $12.2 million was stolen and $11.7 million reimbursed as of Aug. 22.

Reimbursement approval rates show many victims are like Fleeton, who received only a portion of the amount stolen from them. As of Aug. 22, DHS had approved 79% of total claims but refunded just 64% of the total amount reported stolen, meaning many victims are being only partially reimbursed. It is unclear how much is from underpayment versus outright denials because the state agency has refused to release the data to The Banner.

Public records and interviews with advocates and welfare recipients suggest the main source for this discrepancy is likely DHS prioritizing federal reimbursement requirements, which cap how much victims can be reimbursed.

As of Aug. 22, 2023, the internal emails said the state had paid just $371,000.

That has left many Maryland families who were reimbursed only a portion of their stolen benefits or had their claims denied struggling, said Michelle Salomon Madaio, a lawyer with the Homeless Persons Representation Project.

“You can’t go back in time and feed your family,” said Madaio, who helped draft the state law. “Kids are missing meals. They are going to school hungry. There is harm.”

Going line by line

A coalition of state lawmakers, advocates for low-income families and DHS officials met in February 2023 to discuss creating a state benefits theft reimbursement law. It was the beginning of what would become a swift drafting process, according to those in the room.

“We were all literally at the table together in Annapolis going through this bill draft line by line, talking about it through email, and then ultimately when it was time for the hearing, we were all up there together — the advocates, DHS Secretary [Rafael López] and other DHS staff to support the bill,” said Public Justice Center attorney Ashley Black, who helped write the legislation.

The goal was simple, according to state Del. Robbyn Lewis, who co-sponsored the bill.

“Our intent was to provide full reimbursement of stolen food and cash benefits,” Lewis said.

DHS publicly supported it. In a letter to the Senate Finance Committee, a DHS official wrote, “Marylanders who have experienced such theft need to be made whole and the process for reimbursement needs to be one that takes into consideration the damage done.”

The federal government stepped in first. It passed a bill in December 2022 that allowed states to use federal funds to reimburse for stolen food assistance. Maryland was the first state to begin reimbursing under the federal plan.

The federal funds came with limitations. Victims could be reimbursed for only two months’ worth of benefits annually, and it applied only to thefts that took place from October 2022 to September 2024. The federal government also asked states to impose deadlines on reimbursement applications.

Maryland lawmakers and advocates sought to pass a more expansive bill, one that would fully reimburse victims without deadlines or limits on how much, or how often, stolen funds could be replaced. They even added a provision for retroactive reimbursement for thefts that occurred before October 2022.

On April 24, 2023, Gov. Wes Moore signed the emergency bill into law. It was effective immediately. At the bill signing, DHS officials, advocates, state legislators and theft victims posed arm in arm for photos.

Then, in June and July, a DHS official sent memos to the directors of all local departments that advocates and policy experts say directly undermined the state law.

According to the memos, DHS interpreted the state law to apply only to the retroactive reimbursement period of Jan. 1, 2021, to Oct. 1, 2022. The agency told its local department heads that all further thefts were subject to federal reimbursement guidelines, including its deadlines and reimbursement caps.

Dueling laws

Two months after her benefits were stolen, Fleeton found herself pleading her case before an administrative law judge through Maryland’s Office of Administrative Hearings. She’d filed an appeal with the agency hoping to recoup the remainder of her stolen funds.

“If I don’t receive this money back, it will cause a major hardship for me,” Fleeton told the judge. “This is how I feed myself.”

Fleeton explained to the judge that she had carefully saved her food stamps up to almost $2,500, preparing for when welfare pandemic aid ended in March 2023, plummeting her monthly benefits from a couple hundred dollars a month to $23.

The DHS representative said, while the department “empathizes and sympathizes with Ms. Fleeton’s situation,” it is simply upholding its written policy and following federal law.

It’s a speech Fleeton said she has heard before. Days before, she said, a DHS representative called her and encouraged her to withdraw her appeal. The federal guidelines were clear, Fleeton recalled being told. The hearing would do nothing to change that.

“I felt they were trying to get me to drop it,” Fleeton said. “But my gut was like, ‘No, keep fighting.’”

A week after her hearing, the judge issued his decision. The local department acted “pursuant to the applicable [federal] law,” he said.

The state law was not mentioned throughout her case.

A change of position

Advocates first noticed problems a few months after the state law’s passage. Both the Public Justice Center and the Homeless Persons Representation Project began receiving calls from clients whose stolen benefits were only partially reimbursed or whose claims were denied.

“My jaw dropped. I was so surprised,” Black said. “[DHS] had essentially changed its position and started doing something that was very different from what the plain language of the law says.”

Advocates and lawmakers interviewed by The Banner said the intent of the law was to ensure total reimbursement in perpetuity — not only for the retroactive period as DHS internal memos argued.

Neither the advocates nor lawmakers know why the department is doing this. And DHS didn’t offer further clarity in requests for comment from The Banner.

Ashley Burnside, a senior policy analyst at the Center for Law and Social Policy who was not involved in the bill’s drafting, agrees that the language of the bill is clear. Theft victims are entitled to full reimbursement, not just for the retroactive period.

”Unfortunately, it doesn’t surprise me a ton,” Burnside said of DHS’ interpretation of state law. “At the end of the day, states are hesitant to spend their own revenue often when there’s opportunity to use federal dollars.”

The Aug. 22 email also included that more than 400 claims were denied because of a “two-max limit” (or the two-month federal reimbursement limit) and over 700 due to “untimely claims” (or requests submitted after the federal deadline). The state law, however, does not stipulate any reimbursement limit or deadlines.

What the email also suggests is that, despite being reimbursed just $46 of the nearly $2,500 in benefits stolen, Fleeton’s case was considered an “approved claim.”

Drowning in quicksand

After her appeal was denied, Fleeton filed for judicial review with the Circuit Court of Prince George’s County in August.

Preparing for court, she started calling legal aid nonprofits looking for help. She eventually got connected with Black, who was the first person to tell her about the state law that said she was legally owed full reimbursement.

“I couldn’t believe it,” Fleeton said. “My gut was right.”

Black took on Fleeton’s case. After weeks of negotiations, DHS asked to settle, agreeing to fully reimburse Fleeton if she dismissed the case.

Fleeton received the funds in October, six months after her benefits were stolen, which meant six months of mounting credit card debt and late bills to keep food on the table.

Even with the full reimbursement, she says she hasn’t been able to pay everything off.

“It’s like you’re in quicksand, you’re drowning and constantly trying to get up,” Fleeton said. “It’s been rough. I’m still trying to get it together.”

Brenna Smith

brenna.smith@thebaltimorebanner.com

Brenna Smith is an investigative reporter for the Baltimore Banner.

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