California has reported a significant decline in electronic benefits card theft, with Gov. Gavin Newsom crediting the state’s rollout of anti-fraud technology. The announcement comes as the Trump administration intensifies pressure on Democratic-led states over benefits fraud.
Electronic benefits theft dropped to more than $4 million per month last fall in California’s CalFresh food assistance and CalWorks cash welfare programs, down sharply from $20 million per month two years earlier, according to Newsom’s office. The state uses taxpayer money to reimburse victims when they report theft.
“In California, we’re leading the way by turning innovation into action by stopping theft and ensuring benefits reach those who truly need them,” Newsom said in a press release.
The Trump administration earlier this month froze federal social services funding to five Democratic-led states, including California, citing fraud concerns in public benefits programs. A federal judge halted the freeze for now, including funds for the CalWorks cash aid program.
Card Skimming, Not Recipient Fraud
The fraud California has been addressing is not traditional “welfare fraud” in which recipients misuse benefits. Thieves have been using card-skimming devices to steal account numbers from EBT cards, then duplicating the cards and draining them before legitimate recipients can access their benefits. Nearly 200 people have been charged across California in these schemes, Newsom’s office said.
California’s Technological Response
Since 2023, California responded to the skimming crisis by issuing chipped EBT cards and introducing a mobile app allowing recipients to freeze their accounts to prevent withdrawals. Last year, the state began using a computer model to detect fraudulent withdrawals and forced resets of some CalWorks recipients’ EBT card personal identification numbers.
Investigators Question the Numbers
But local welfare fraud investigators questioned the completeness of the state’s reported gains.
Gregory Mahony, president of the California Welfare Fraud Investigators Association, said the state’s reported theft figures are undercounted. The numbers are based on reimbursements the state provides to county welfare departments. But some recipients don’t report theft at all, or report multiple months of stolen benefits but receive only partial reimbursement, Mahony said.
Mahony also criticized California’s 2023 decision to drop a requirement that victims file police reports each time their benefits are stolen to receive reimbursement. That decision has hurt the state’s ability to track theft and fraud, he said.
“This is not a systemic victory,” Mahony said. “It is a delayed and partial mitigation of a crisis long allowed to grow unchecked.”