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Chairman Smith Calls for Long Overdue Investigation into COVID Unemployment Fraud

WASHINGTON, DC –A historic theft of taxpayer dollars from COVID-era unemployment programs is facing increased scrutiny as a new report released today from the General Accountability Office (GAO) adds to the growing body of evidence. The report only scratches the surface of what is publicly known about the unprecedented scope, size, and severity of the fraud:

  • According to the report, “available estimates provide additional evidence of substantial levels of UI fraud and potential fraud during the pandemic, but none completely or reliably indicates the extent of fraud in UI programs.”
  • GAO’s report suggests at least over $60 billion in stolen funds, however the actual amount is not known. The extent of the theft is so great that GAO has committed to build on existing evidence with its own independent modeling to calculate a more precise estimate.
  • The Washington Post reported the Labor Department Inspector General estimates at least $163 billion could have been improperly paid, with a significant portion attributable to fraud. If the government’s best estimate is accurate, only 2.4 percent of wrongful payments have been recovered.
  • Some estimates by outside experts say as much as $400 billion, or nearly half, of unemployment benefits paid during the pandemic may have been stolen.
  • According to GAO, the Labor Department has still not yet developed an antifraud strategy.

House Ways and Means Chairman Jason Smith (R-MO) said:

“This report proves what Republicans have already been saying. American families, whose wages have eroded under President Biden’s inflation crisis, have watched as hundreds of billions of their hard-earned tax dollars were lost to criminal activity and fraud because Democrats refused to acknowledge the problem and repeatedly rejected Republican efforts to put basic safeguards in place to protect against this activity.

“Congressional Democrats walked away from their oversight responsibilities of getting to the bottom of how this happened, what they could do to prevent it, and even how much has fully been lost, leaving criminals to profit off the backs of taxpayers. Republicans are committed to investigating fraud and conducting rigorous oversight on behalf of working families.”

For more than two years, Democrats did nothing to protect American taxpayers, turning a blind eye to unchecked fraud and failing to hold a single oversight hearing or investigation, despite repeated calls from Republicans.

In September, Democrats doubled-down by rejecting a “resolution of inquiry” offered by Ways and Means Republicans that would have held top Biden Administration officials accountable by forcing them to respond to reports of pandemic unemployment fraud.

WHAT WE KNOW

  • Criminal organizations, including international cybercrime rings and opportunistic foreign actors, exploited a national crisis to steal billions from American taxpayers. Fraud delayed legitimate payments and turned thousands of Americans into unwitting identity theft victims.
  • In just two and a half years, federal and state payments from three pandemic-related unemployment programs totaled more than $878 billion, but the amount lost to fraud is still not known.
  • Since the summer of 2020, repeated alerts from federal law enforcement agencies warned of targeted efforts involving organized cybercrime, foreign actors, and international crime rings using stolen identities of American citizens to obtain fraudulent unemployment benefits. Yet, Congressional Democrats have failed to hold a single oversight hearing.
  • A review of unemployment benefits in just four states, found that 42 percent of pandemic unemployment assistance funds were improperly paid, and one in five dollars likely went to fraudsters.
  • As of September 2022, the Labor Department’s Inspector General reported opening more than 31,000 investigative matters involving alleged unemployment fraud, reported that investigations have resulted in more than 1,000 individuals being charged with crimes, and $45.6 billion in potentially fraudulent UI benefits paid to individuals with Social Security numbers: (1) filed in multiple states, (2) of deceased persons, (3) filed with suspicious email accounts, and (4) of federal prisoners.
  • In December 2021, the Pandemic Response Accountability Committee published a report compiling the results of investigations from 16 state auditors, finding $39 billion in pandemic unemployment fraud.

READ: Democrats Vote to Blatantly Ignore Greatest Theft of American Tax Dollars in History

READ: REPORT: Fraud overwhelms pandemic-related unemployment programs

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