Committee finds: Taxpayers lost more than $100 billion due to COVID unemployment insurance fraud

FIRST ON FOX: As the House Oversight Committee found, American taxpayers lost more than $100 billion through fraud and improper payments as a result of the temporary unemployment insurance programs created in response to Covid-19.

Fox News Digital obtained the report from the House Oversight Committee following its months-long investigation into fraud in unemployment assistance programs during the pandemic.

The report contains detailed information, documents and communications available to the committee showing how states across the country, including California, New York and Pennsylvania, processed and administered unemployment claims during the pandemic with “minimal oversight.”

The committee said a lack of oversight had resulted in “billions of taxpayers’ dollars being lost through improper and fraudulent payments that will likely never be recovered.”

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The committee found that 11 to 15 percent of benefits paid during the pandemic were fraudulent, totaling between $100 billion and $135 billion. The Labor Department’s Office of the Inspector General estimated that at least $191 billion in pandemic unemployment insurance payments may have been improperly paid, with a “significant portion attributable to fraud.”

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The committee found that states have only received back about $6.8 billion of these funds.

The committee also found that beneficiaries “were not required to provide evidence that they were actively seeking work in order to continue receiving benefits.”

During the first nine months of the program, applicants were not required to provide any proof of income, which the committee said made the program more vulnerable to fraud. In December 2020, when Congress reauthorized the program, states began requiring applicants to provide proof of past employment and wages.

The Department of Labor reported that the program had an overall improper payment rate of 35.9%.

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In March 2021, the Biden-Harris administration extended pandemic unemployment insurance programs and benefits for another six months, even though states and businesses were open and the vaccine rollout was underway.

“Citing labor shortages, 26 states decided to prematurely end state welfare payments, arguing that exorbitant state welfare payments in those states were creating labor shortages,” the committee found.

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However, the committee also found that organised crime played a “significant role” in unemployment insurance fraud by exploiting existing weaknesses in the system.

“Foreign nationals, organized criminal gangs, prison inmates and their agents have filed fraudulent claims in several states,” the report said. “Insiders, including those working for state employment agencies, have conspired with organized criminal groups and others to defraud state unemployment insurance programs, and states have done little to stop them.”

House Oversight Committee Chairman James Comer (R-Ky.) blamed Democrats and the Biden-Harris administration for the fraud, saying they “spent trillions of dollars under the guise of pandemic relief.”

Comer said his committee’s first hearing on the matter revealed how “uncontrolled spending exposed taxpayer funds, including unemployment insurance programs, to significant waste, fraud and abuse.”

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“While Democrats ignored this waste of taxpayer money, Republicans worked to expose how those taxpayer dollars fell victim to fraudsters and criminal organizations,” Comer said.

Comer said his committee’s report includes recommendations to ensure that future taxpayer-funded unemployment insurance programs “do not suffer a similar fate.”

“Eradicating waste, fraud, abuse and mismanagement in the federal government remains one of Oversight Republicans’ top priorities and we will continue to work to protect all American taxpayers,” Comer said.

The committee recommends that future unemployment benefit programs require the government to require applicants to provide proof of employment before assessing their eligibility.

“Unemployment insurance should always be linked to employment,” the report says.

The committee also recommends that future programs “require state employment agencies to check applicants against federal databases” – including federal prisoner databases.

Meanwhile, the committee recommended that Congress consider extending the statute of limitations on the fraud schemes related to the pandemic unemployment insurance programs, which are set to expire in March 2025, so that criminals who defrauded taxpayers can be brought to justice.

Source of the original article: Committee finds: Taxpayers lost more than $100 billion due to COVID unemployment insurance fraud