EBT Cards Turned Into Drug Cash?

Undercover video from New York City smoke shops and bodegas is raising fresh alarms that taxpayer-funded EBT cards may be quietly turned into cash for drugs and alcohol instead of food.

Story Snapshot

Undercover footage shows clerks trying to run kratom and other items through Electronic Benefit Transfer (EBT) systems as “EBT cash” or “EBT food.”
Federal and New York rules clearly ban using Supplemental Nutrition Assistance Program (SNAP) food benefits to buy alcohol, drugs, or tobacco, yet past fraud cases show some stores still do it.
Separate government crackdowns reveal a wider pattern of EBT card skimming and benefit theft in New York City, costing families and taxpayers tens of millions of dollars.
The clash over this latest video revives old questions about edited undercover footage, weak enforcement, and a system that many voters feel lets street scammers and government insiders win while working families lose.

What the Undercover Video Claims to Show

O’Keefe Media Group released footage of reporters going undercover into smoke shops and bodegas across New York City to see if clerks would accept government EBT benefits for drugs or alcohol. In one scene, a clerk appears to try to ring up kratom, a psychoactive plant product, as “EBT cash” or “EBT food.” The narration says store workers are “swiping the EBT card for illicit substances,” suggesting this is not a one-time mistake but part of a loose local pattern.

The video also shows a call to the number on the back of a New York EBT card, where a representative confirms that people cannot buy drugs directly with an EBT card but can spend withdrawn “EBT cash” on whatever they want, including alcohol or drugs. The clip further highlights a receipt from one smoke shop that lists a different business name and address, which the producers imply could mean a cloned payment terminal or other merchant fraud, though they do not provide device-level proof.

What the Law Says About EBT and SNAP Purchases

Federal rules for the Supplemental Nutrition Assistance Program, often called food stamps, clearly ban using SNAP food benefits to buy alcohol, tobacco, or non-food items. Under United States law and regulations, retailers who accept SNAP must follow strict rules that limit purchases to eligible food, and they sign agreements promising not to trade benefits for cash or banned goods. New York State rules mirror this and label selling benefits for money, drugs, or other prohibited items as clear fraud that residents can report through city hotlines.

At the same time, the system is split: some EBT cards carry SNAP food benefits, while others also hold cash assistance. The video’s own transcript shows the EBT representative drawing that line, saying drugs cannot be bought directly with the card but that once someone pulls out “EBT cash” at an ATM, they are free to use that money as they choose. This legal difference makes it vital to know whether a store is misusing SNAP food benefits, helping convert cash, or simply witnessing how cardholders spend money after withdrawal.

Documented EBT Fraud in New York City

Separate from the undercover video, there is hard evidence that some New York merchants abuse EBT cards and SNAP. Federal prosecutors charged two defendants with misusing about $20 million in SNAP benefits at a Brooklyn bodega by trading food benefits for cash and non-eligible products like beer, and by using counterfeit or stolen EBT cards. In another case upstate, merchants were accused of allowing customers to buy alcohol and cigarettes with food benefits and to receive cash back, which is also illegal.

Alongside these benefit-trafficking schemes, law enforcement has uncovered widespread EBT skimming in New York City, where criminals attach secret card readers and cameras to terminals to steal card data and PINs. The United States Secret Service says its New York Field Office recently ran a three-day operation in Brooklyn, the Bronx, and Queens that found 35 illegal skimming devices and blocked an estimated $36.5 million in fraud. A statewide review found scammers stole at least $52 million in food benefits from New Yorkers between 2023 and 2025.

Editing Controversy and Public Distrust

The latest clip also arrives in a media environment shaped by past undercover video fights. In the 2009 ACORN case, James O’Keefe released edited footage that seemed to show staff helping with serious crimes, but the Brooklyn District Attorney later cleared the group after watching unedited tapes and called the earlier versions “heavily edited.” That history makes many people ask for raw video and full context before they fully accept new undercover claims, especially when they hit hot-button topics like welfare and urban crime.

For many Americans, especially older conservatives and liberals who feel the system is rigged, stories like this confirm a deeper fear: the rules are strict for regular citizens, but loose and uneven for scammers, retailers, and the government agencies in charge. On one side, people see bodegas and smoke shops gaming the EBT system while federal and city officials move slowly or speak in technical language. On the other, they see agencies running big stings and press conferences but still failing to stop benefit theft or hold everyone accountable.

What Comes Next and Why It Matters

So far, there is no public record in this research of official enforcement actions that name the specific stores shown in the O’Keefe video or confirm exactly how each transaction was processed. That gap raises fair questions about proof, editing, and due process, yet it does not erase the larger fact that documented EBT fraud and skimming schemes are already draining tens of millions of dollars meant for food. For voters who believe a distant “deep state” protects the powerful while lecturing the poor, that mix of real crime and weak, slow oversight deepens a shared frustration across party lines.

Whether future investigations validate every scene in this latest undercover report or not, the core issue is clear: Americans are funding programs that are vital for hungry families but also attractive targets for crooked merchants, card thieves, and maybe even sloppy or corrupt bureaucrats. The more stories emerge of dusty corner stores, cloned terminals, and EBT cards turned into cash for contraband, the more both left and right will demand something the federal government has struggled to deliver for years—simple, honest protection of public money and basic fairness for people trying to reach the American Dream through hard work.