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Indiana welfare dollars spent in liquor stores, strip clubs, Disneyland

• May 16, 2012 12:15 pm

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Federal food-stamp and Indiana welfare money is being spent in liquor stores, strip clubs, and more than 35 states outside of Indiana, CBS-Indianapolis reports:

REPORTER: To find out where that money went, I-Team 8 dug through 400,000 TANF transactions made at ATMs, about one-third of Indiana withdrawals made last year. We quickly found troubling transactions. These two Indianapolis liquor chains alone appear on the list at least 130 times, dispensing more than $12,000 in cash between them. Add in the other withdrawals at liquor stores across the state, and the amount grows to $61,000.

And every one of those transactions was illegal. Here on the West Side, there are three restaurants within a half-block that have ATMs inside, and down the block, a full-service bank. That’s not all I-Team 8 uncovered. Withdrawals from three Indiana casinos and dozens of bars and clubs, including this Dave and Buster’s in Castleton and Chicago’s House of Blues.

But it may be the withdrawals we found that aren’t illegal that are the most eye-opening: $42,000 at tobacco stores and smoke shops; $2,100 inside strip clubs, including these four in Indianapolis. Club managers wouldn’t talk to us on camera. But two said off-camera that withdrawing welfare cash there "doesn’t seem right." Kayla calls that an understatement:

KAYLA, WELFARE RECIPIENT: That’s kind of crazy, spending your money on lap dances and beer and stuff like that, and you can’t take care of your kids.

REPORTER: Can you see someone being outraged by that?

INDIANA GOV REP: I would say that Indiana is pleased that less than one percent of our transactions are taking place in inappropriate locations.

REPORTER: But less than one percent is still—we found less than one percent is still over $100,000. That’s a significant amount of money.

INDIANA GOV REP: Yes, that is something we will be looking at.

REPORTER: But I-Team 8 looked closer and found the numbers only tell part of the story. We found Hoosier Works cards being used in 39 different states—your Indiana tax dollars being withdrawn at an incense shop in L.A., a beauty salon near Atlanta, and golf course on Hilton Head Island. Here’s one at Disney World in Florida, and seven right outside Disneyland in California. Money even flowed under the neon lights in Las Vegas. This withdrawal on famed Fremont Street went for $200. This one outside the Venetian went for $280. And the list goes on. Amusement in Ohio, a luxury R.V. park in Mississippi, bowling in Milwaukee. Then there’s that withdrawal from paradise—Hawaii. The grand total $120,000 worth of questionable withdrawls, at least $68,000 of that was withdrawn from places already banned under state law. How could that mean illegal transactions go unnoticed?

INDIANA GOV REP: Here in Indiana, we do monitor transactions that take place inappropriately and refer those on.

REPORTER: Why aren’t those being stopped?

INDIANA GOV REP: Indiana—DFR—has no control over those actual ATM machines.

REPORTER: The big question is who does? We’re continuing to uncover new questions as we analyze this data. Just today, for example, we found two more withdrawals from Puerto Rico. Among other questions still unanswered tonight, how many illegal withdrawals has the state caught, has anyone been caught for making those, and why isn’t Indiana blocking those transactions like other states have to keep this from happening in the first place?

Published under: Video, Welfare