Undercover reporting indicates that several New York City shops are accepting Electronic Benefit Transfer (EBT) cards for the purchase of Kratom.. These transactions allegedly bypass federal guidelines that limit food stamp funds to nutritional items.
The "Benefit: Food" receipt and the Kratom loophole
An investigation by the O'Keefe Media Group (OMG) claims that store clerks in New York City have been processing transactions for Kratom using EBT cards. During the probe, James O'Keefe recorded workers swiping cards for customers purchasing the substance, which is available as a liquid extract, powder, or in capsule form. in one specific instance, a clerk provided a receipt that explicitly listed the transaction as "Benefit: Food," despite the item being a non-food supplement.
According to the Mayo Clinic, Kratom is an herbal extract used by some as a pain reliever or an energy booster, often to mitigate opioid withdrawal. However, the Mayo Clinic also warns that users of the substance may face an increased risk of addiction, adding a layer of public health concern to the alleged misuse of government funds.
Federal SNAP restrictions and New York Penal Law
Federal regulations are explicit regarding the Supplemental Nutrition Assistance Program (SNAP), strictly limiting EBT benefits to eligible food items. The rules prohibit the purchase of alcohol, tobacco, and drugs. As O'Keefe Media Group reported, the attempt to accept these benefits for ineligible products is not merely a regulatory violation but constitutes a crime under New York Penal Law.
The investigation suggests that clerks may be manipulating the point-of-sale system by selecting "EBT Food" or "EBT Cash" to force the transaction through. This suggests a level of familiarity among some New York City retailers with the technical gaps in the EBT processing software.
Brooke Rollins' findings of $10,000 EBT balances
The alleged fraud in New York City mirrors larger systemic failures identified at the federal level. As Breitbart News reported in November, Agriculture Secretary Brooke Rollins reviewed data from 29 states and discovered staggering anomalies within the SNAP system. These included EBT cards carrying balances exceeding $10,000, accounts that had remained dormant for years, and benefits issued to non-existent individuals.
These findings have fueled efforts to overhaul the program. In May, Vice President JD Vance's Task Force to Eliminate Fraud began working on specific actions to remedy what they describe as systemic corruption and abuse within the SNAP framework.
The distinction betwen EBT Food and EBT Cash
A critical point of ambiguity remains regarding how funds are actually withdrawn. A representative contacted via the number on the back of a New York EBT card confirmed that while the cards cannot be used to buy drugs, funds withdrawn as cash via an ATM or terminal can be spent without restriction. This creates a gray area: it is unclear whether the New York City clerks were processing "Food" benefits illegally or if customers were simply using "Cash" benefits that the stores were incorrectly labeling.
Furthermore , it remains unknown how many stores across New York City are engaging in this practice beyond those targeted by the O'Keefe Media Group. While some employees denied the transactions and one store closed its doors to journalists, there has been no official statement from New York City law enforcement regarding a wider crackdown on Kratom-related EBT fraud.
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