Investigators with the Government Accountability Office found beneficiaries selling or trading food stamps online for cash, art, beer, and even housing.
The program, now officially known as SNAP or the Supplemental Nutrition Assistance Program, cost taxpayers about $76 billion last year.
The GAO says states have recovered more than $70 million in fraudulent payments in 2013.
But investigators suspect that's only a fraction of the fraud tied to selling food stamps.
This is this week's Golden Hammer story, a weekly story with investigative news partner The Washington Times that shines a spotlight on possible government waste and abuse of tax dollars.
To read more on this story visit the Washington Times.