WATCHDOG: Less than $1 Billion Recovered as Key UI Fraud Estimate Increases to $163B

March 25, 2022

Key Takeaways:

Less than $1 billion has been recaptured of the total taxpayer dollars lost in improper UI payments over the course of the pandemic, according to testimony from the Department of Labor’s (DOL) Inspector General Larry Turner, who also raised the “low-end” estimate of the total losses from $87 billion to $163 billion. Outside experts say the number could be as high as $400 billion.
The scope of the pandemic fraud has been immense: During a congressional hearing, one witness testified that 1,200 indictments or complaints have been filed, 1,000 arrests have been made and nearly 500 convictions have been handed down.
This doesn’t even account for all the suspected fraud: This estimate does not include fraud in the most susceptible program, Pandemic Unemployment Assistance, which had few fraud prevention measures and allowed “self-certification.”

This comes after the Biden Administration’s recent guidance granting blanket waivers to allow states to waive suspicious overpayments.

Background:

Republican Committee Members Have Sounded the Alarm on COVID-Related Fraud for More Than a Year.

Ways and Means Committee Democrats unanimously rejected a proposal offered by Ways and Means Republicans to verify the identity of applicants for unemployment benefits and get documentation prior to sending any money out the door.
Requests for a joint hearing on fraud in pandemic-era programs have fallen on deaf ears and letters to the Biden Administration have gone unanswered.

The Biden Administration Has No Idea How Many Tax Dollars Have Been Lost to Fraud or Improperly Paid.

In February 2022, the White House estimated that 19 percent of total COVID unemployment insurance payments were lost to fraud – totaling over $80 billion.
The DOL’s new estimate puts that number much higher.

Republicans Are Fighting Against Unchecked Unemployment Fraud and Abuse of Taxpayer Dollars.

While the Biden Administration calls for more COVID relief, Ways and Means Republican Leader Rep. Kevin Brady (R-TX), House Budget Committee Republican Leader Rep. Jason Smith (R-MO), and House Energy & Commerce Committee Republican Leader Rep. Cathy McMorris Rodgers (R-WA) have demanded the Administration provide a detailed accounting of where the $6 trillion in COVID-19 funding has been spent.
Rep. Brady, along with top Republican leaders, introduced the Combatting COVID Unemployment Fraud Act of 2021 to prevent fraud in COVID unemployment programs, recover fraudulently paid benefits, and provide relief for taxpayers and victims of unemployment fraud.
Ways and Means Republicans, led by Republican Leader of the Worker and Family Support Subcommittee Rep. Jackie Walorski (R-IN) have held two public meetings with industry experts to raise awareness and offer safeguards to taxpayer dollars. Watch those meetings here and here.