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Thousands in welfare cash tapped at California strip clubs

California welfare recipients have been able to get taxpayer cash -- meant to feed and clothe needy families -- from ATM machines at strip clubs across the state, including some well-known gentlemen’s cabarets in Los Angeles.

More than $12,000 from the Temporary Assistance for Needy Families program was dispensed from the start of 2007 to the end of 2009 at clubs including Sam’s Hofbrau, Seventh Veil and Star Strip, according to officials at the Department of Social Services.

Gov. Arnold Schwarzenegger has ordered the department to remove the clubs from the official list of businesses where welfare recipients can withdraw benefits using state-issued ATM cards.

The move came a day after The Times asked the administration how much welfare cash had been withdrawn at 17 adult clubs in recent years and less than a week after The Times reported that more than half the casinos and state-licensed poker rooms in California appeared on an official website showing welfare recipients where they can access cash benefits.

Following that report, Schwarzenegger ordered the casinos struck from the state’s ATM network and directed the Department of Social Services to produce a plan to reduce “waste, fraud and abuse” in the welfare program.

“We'll take a wide-ranging look and apply some common sense to the list of outlets where cash assistance should not be withdrawn,” Department of Social Services spokeswoman Lizelda Lopez wrote in an e-mail to The Times on Tuesday evening, announcing that her department had “taken steps to deactivate ATMs in adult entertainment clubs.”

Strip-club managers seemed shocked that welfare benefits were accessible through their ATMs.  In most cases, the machines were provided by a third party, the managers said, and they had no way of knowing their ATMs are part of the state system.

The state contracts with the Quest ATM network.

“If there’s a way that the ATM can reject their card if they’re on welfare, I’m really and truly all for that,” said Merle Matias, manager at Sam’s Hofbrau in downtown Los Angeles, where $2,159 had been withdrawn, according to Department of Social Services officials.  “I don’t think it will affect us at all.”

Star Strip manager Joey Mancini said state officials must be wrong about the $1,265 they said had been withdrawn from his club’s ATM.  The Quest symbol isn’t on the machine, he said, adding that he thought any system that allowed access to welfare benefits at a strip club should be reformed: “This is not what that money is for.”

A manager at Seventh Veil declined to comment.

-- Jack Dolan in Sacramento

Comments () | Archives (168)

Here's the deal:

Removing the ability for welfare cardholders to withdraw cash from an ATM in a strip club isn't going to stop them from going to strip clubs. There are other ATM's on the street.

What the genius Governor needs to do is trace the names of these welfare/strip club attendees and have each one investigated for WELFARE FRAUD.

Let some of these lazy government employees get off THEIR butts and actually do their jobs for a change.

Let's clean up this mess so we can get out of this hole !


I'm with Patriot. $12,000 from hundreds or thousands of people or what? Article doesn't even say. And it's over the course of 2-3 YEARS at an undisclosed and undefined number of clubs. This article feels a bit biased based on lack of research of important facts... the second paragraph doesn't verify that all are strip clubs?

It does seem absurd that vulnerable people would be able to get their welfare money at a place like that... not that making them get it somewhere else will change the problem. I'm surprised it was allowed and for a reform.

But, it seems a good bet that many would live in crappy housing above a strip club or something... cheap rent, right? And that would make it most convenient to get their money from the club rather than miles away at a bank branch. How would we even know?

there is no good reason to give them any cash. None!!! vthey have housing, obama cell phone, medical, medicaid, daycare and food stamps and countless other programs... no reason for cash period. END ALL CASH. NO PROGRAMS UNLESS AN AMERICAN CITIZEN!

J.J. in responds to your comments about immigration. It's not about Legal Immigration the issue is about Illegal Immigration! Crossing our borders illegally is a misdemenor. Crossing our border after being deported is a Felony min 1-5 year in prison. Not reporting your income to the I.R.S. is a tax invasion another Felony. Obtaining and carring fraudulent Social security number,and or Id's another felony. Signing your I-9 form as a legal worker if you illegal is prejury another felony. Obtaining un authorized employment in the United States anther misdemenor. With all these illegal actions why would we want to reward bad behavour with legal status?

This is outrageous! I just finished graduate school, have a little mountain of debt, got my first real paycheck this month and low and behold! I got taxed 600.00 dollars. For what? To give welfare recipients money for a motor boat! It's not right! They need to restrict the cards. Why can't they just stick to giving these ppl food stamps and or make arrangements for them to get their bills paid directly by the welfare office.

Hey LA Times. How come you did not do the math and divide $12,000 by 3 years. That's $4,000 a year. then divide that by 12, that's $333 a month. this is just what 1 person on welfare would get in a month. So it's $333 a month for the whole state. Mostly likely it's one of the strippers (majority of whom are young single mothers on some kind of welfare) cashing her welfare check to pay her rent. This is hardly worth all the vicious comments your article generated. Great investigative reporting, LA Times!

do banks have branches or ATMs in neighborhoods where the majority of welfare recipients live?

Ok people, lets do the math here and really figure out how much of an impact this had on our states welfare program. 500 bucks a month is what was taken out of the ATM's if you do an average. This is hardly significant since most wastefull spending is done at the Capitol. Come on Governater! You have got to be kidding me! More people are probably using welfare money it to purchase drugs and launder. 12K isn't anything. The only reason why this is news and now the state has to react is because of main stream media. Had no one ever known about this and the press ever got the story, it would not be news. Oh BTW "the goose is loose."

Who is surprised by these kinds of atrocities anymore? Isn't this the behavior we expect from an inbred, self-serving symbiosis of tax payer funded state public employees 'serving' the needs of the needy, who in turn vote for more of the same? THIS is why the only way to stop this is END these uselessly expensive welfare programs. Let them leave the state and find some other suckers , if they can, to support them.

Tony Balony is speaking balony when he claims that 12k of strip club welfare fraud is no big deal. Ok, then how about those welfare recipients paying it back? I mean if 12k is no big deal then they should have no problem paying it back. Right?

Tony Wolf, I agree that these no income people should pay every cent back by becoming productive members of society. But it is like if we decide to sue a poor individual and win judgement. Do you really think that we will collect any money from this poor person. I doubt that we will see a cent yet alone 12K.

This is peanuts compared to the money we're spending in Afghanistan, Israel and Iraq and this money circulates through the economy. The Israel and War Money evaporates.

Makes sense. People on welfare are poor. Strip clubs are cheaper than dating and hookers. What next? No ATMs in video game shops? Thrift stores? Discount grocers?

As a news site you guys should know it's not called an "ATM machine". It's an ATM. Tacking on machine is redundant and makes you look ridiculous.

How many strippers with kids at home are getting some sort of financial assistance in the form of welfare? Plenty.

they should trace the withdrawals back to the correct accounts and punish them accordingly, maybe deny they're benefits for a while?

I understand that people on public assistance need a life too, but using ur cash benefits at strip clubs and casinos, etc. is just discusting...how dare u have kids and refuse to care for them for long periods of time and use the monies this way. It's ok to have welfare if u just lost ur job and need it for a moment, but just using it cause its available just sad. I think America needs to bring a type of money for walfare recipients, a money to where it doesn't look like other money, so these type of establishments cant get it, nor can u sell ur monies to get real money cause the only way to spend the money is by the card only, no paper cash needed or allowed. There should be certian business taking this money (no fast food places either), they should pay their rent, buy clothing, by transportation needs, groceies for this money, not to have fun and be lazy for the remainder of their childrens lfe...We need to get our assistance programs straightened out, and I think you should transfer section 8 program into a homebuyers program for low income families so the state dont end up paying peoples rent forever, ok, the government build small homes for people on section 8 who have two or more children, at the same market assisted rent they are paying apartment buildings, they can pay on the home from the state, the state gets that money, and u helped a low income family get a home, win win situation, there needs to be a real help, not a temporaray one.


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