Re: is this a form of medicaid abuse?
Often times the people who are driving expensive cars while living on public assistance have, excuse the politically incorrect term, a sugar daddy paying for it. Basically, they poor mouth their way into all the assistance they can receive by claiming they are single, and the other half spends whatever income (usually from drugs) on expensive cars, large screen TVs, etc. It's pretty pathetic. It also means bye-bye Escalade when sugar daddy leaves, and they always leave.
So yes, report her. If she is involved in drugs and it's questionable if her kids are being fed adequately if she is selling the food stamps, then it would be best for the kids for an investigation to happen.
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