Up to $135 billion in COVID-era unemployment benefits stolen by fraudsters, watchdog finds

A recent report from a government watchdog agency found that $100 billion to $135 billion in COVID-era unemployment benefits was stolen by fraudsters.

The Government Accountability Office released a September report titled, "Estimated Amount of Fraud during Pandemic Likely Between $100 Billion and $135 Billion."

The agency's latest estimates are over double previous projections released last year that claimed fraudsters stole $45.6 billion in unemployment benefits. In September 2022, the inspector general claimed that 205,766 Social Security numbers belonging to deceased individuals were used to file for unemployment insurance benefits.

However, the GAO's new report revealed that approximately 11%-15% of UI benefits paid from April 2020 to May 2023 were doled out to fraudsters.

"The full extent of UI fraud during the pandemic will likely never be known with certainty," the GAO stated, indicating that the fraud could be even higher.

According to the watchdog agency, the Department of Labor claimed that the GAO's estimates are "likely overstated," expressing concerns regarding the agency's fraud detection methodology.

"GAO disagrees and explains in the report the steps taken to estimate the range of fraud," the report said in response to the DOL's claim.

As of May 2023, states have only recovered $6.8 billion in COVID-era unemployment overpayments, including $1.2 billion in fraudulent UI overpayments.

"The unprecedented demand for UI benefits and the urgency with which states implemented the new programs during the pandemic increased the risk of improper payments, including, but not limited to, those due to fraud," the GAO stated.

Republican Idaho Senator Mike Crapo, ranking member of the Senate Finance Committee, released a statement in response to the watchdog's findings.

"These shocking estimates continue to grow, and, as GAO notes, we may never know the full scope and scale of fraudulent pandemic payments," Crapo said. "Unfortunately, the Administration's efforts to address over one hundred billion dollars in fraud in the UI program have fallen woefully short. Congress should pass the Protecting Taxpayers and Victims of Unemployment Fraud Act to recoup stolen funds for victims and prevent similar large-scale theft from happening in the future."

Republican Missouri Rep. Jason Smith, the House Ways and Means Committee chairman, stated that he was "extremely alarmed" by the GAO's estimates.

"The unfortunate reality is that every day President Biden spends ignoring this problem, the chances of recovering stolen tax dollars on behalf of these fraud victims grow less," Smith stated. He called it "the greatest theft of taxpayer dollars in American history."

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