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Republican Leaders Request Hearing on Unemployment Insurance Fraud

March 15, 2021

WASHINGTON, DC – With new reports of unemployment insurance fraud surfacing daily, Republican Ways and Means leaders requested their House Democrat counterparts to hold a joint hearing to investigate the extent of fraud in CARES Act unemployment programs.

The letter was signed by Ways and Means Republican Leader Kevin Brady (R-TX), Ways and Means Worker and Family Support Subcommittee Republican Leader Jackie Walorski (R-IN), and Ways and Means Oversight Subcommittee Republican Leader Mike Kelly (R-PA).

“A hearing on unemployment fraud is long overdue. Generous unemployment benefits, including the additional $600/week, and now $300/week, are an easy target for criminals using stolen identities. We are concerned that Democrats’ partisan COVID package would extend these unemployment benefits with no additional protections against vulnerabilities, and without having held a single hearing to determine how to prevent further fraud from occurring,” said the Republican leaders.

A copy of the letter can be found here and further background is below.

Key Facts:

  • Ways and Means Committee Democrats unanimously rejected a proposal offered by Rep. Devin Nunes to verify the identity of applicants for unemployment benefits and get documentation prior to sending any money out the door.
  • The Labor Department’s Inspector General and the Government Accountability Office have both issued repeated warnings about the vulnerability for abuse of CARES Act unemployment insurance programs.[1][2]
  • The Inspector General’s initial audit and investigation indicate improper payments could be at least $63 billion, with a significant portion attributable to fraud.[3]
  • The Secret Service circulated a memo to its field offices last May saying an international crime ring has been filing unemployment claims in different states using Social Security Numbers belonging to identity theft victims, including first responders, government personnel and school employees.[4]
  • Last month, California state workforce officials confirmed that they paid out fraudulent unemployment claims totaling over $11 billion and identified another $20 billion in claims still under investigation.[5]
  • And most recently, the Department of Justice issued a warning that fraudsters are creating websites to mimic unemployment benefit websites to capture consumer’s personal information.[6] 

Ways and Means Republicans have been raising concerns about this issue for months. See:

CARES Act Unemployment Fraud – Nearly A Year’s Worth of Headlines with No Response from House Democrats:

March 2021

February 2021

January 2021

December 2020

November 2020

October 2020

September 2020

August 2020

July 2020

June 2020

[1] U.S. Department of Labor, “DOL-OIG Oversight of the Unemployment Insurance program,” February 3, 2021; “Alert Memorandum: The Employment and Training Administration (ETA) Needs to Ensure State Workforce Agencies (SWA) Implement Effective Unemployment Insurance Program Fraud Controls for High Risk Areas,” February 22, 2021.

[2] “COVID-19: Critical Vaccine Distribution, Supply Chain, Program Integrity, and other Challenges Require Focused Federal Attention,” Government Accountability Office, January 28, 2021. (GAO-21-265)

[3] U.S. Department of Labor, Office of Inspector General: https://www.oig.dol.gov/doloiguioversightwork.htm

[4] “Massive Fraud Against Unemployment Insurance Programs, U.S. Secret Service, May 5, 2020, Alert: https://www.documentcloud.org/documents/6891584-GIOC-Alert-20-027-I-State-Unemployment-Fraud-002.html

[5] “McCarthy, Steel, and CA Republicans Condemn Newsome Administration for Mismanagement of $11.4 B in Taxpayer Funds,” February 5, 2021.

[6] U.S. Department of Justice, “Justice Department Warns About Fake Unemployment Benefit Websites,” March 4, 2021.