Failure by the Biden Administration to address over $80 billion in stolen taxpayer funds through unemployment fraud and improper payments could result in even more fraud, according to top watchdogs and experts.

Witnesses at a Ways and Means Republicans Worker and Family Support Subcommittee Meeting called for an investigation into fraud and to examine recent measures by the Biden Administration that only sweep overpayments under the rug.

Seto Bagdoyan, director for audit services at the U.S. Government Accountability Office (GAO)’s emphasized the need for real solutions to manage and prevent future fraud risks:

“It is imperative that Labor take this matter seriously and act decisively to get the fundamentals right so that it can proactively manage fraud risks in unemployment insurance. The existing gaps clearly raise the prospect of a risk spiral, wherein labor and states could again face multiple fraud risks in a future emergency scenario, where they cannot manage these risks effectively.”

Mr. Bagdoyan outlined the GAO’s work towards investigating the measurement and extent of fraud, only to be met by inaction by the Department of Labor:

“Though it is taking some actions, the Department of Labor is not yet positioned to proactively and strategically manage fraud risks related to unemployment insurance in either normal or crisis scenarios.” He said. “This is not a strategically organized effort that we’re seeing so far, and it really isn’t targeting prioritized risks.”

Mr. Bagdoyan provided examples of strategic recommendations from reports by the GAO dated October 2021: 

“We recommended that Labor create a dedicated entity to manage its fraud risk efforts. 

 

“Second, that Labor conduct comprehensive fraud risk assessments to drive its strategy and its actions emanating from that strategy, and then evaluate its current fraud controls and their suitability to help manage risk.”

 

”At this point, it’s unclear how Labor intends to respond,” Mr. Bagdoyan said. 

Acting Special Agent and former law enforcement Secret Service officer Roy Dotson added:

“The scale and scope of this fraud is unprecedented. It is inherently national, impacting all states, regardless of region and demographic, but ultimately victimizing the everyday American citizen. 

 

“As the federal government began to disperse stimulus funds, criminals launched a new wave of schemes aimed at defrauding U.S. and state government agencies, financial institutions, businesses, and even individuals out of taxpayer dollars intended to support our fellow citizens, businesses, and communities in need.”

 

KEY BACKGROUND:

• WATCH the full Republican meeting HERE. 

• READ a recent letter from Republican Leaders to the DOL urging President Biden to justify new guidance that will make it more difficult to investigate fraud: Biden Admin is Stopping States from Recovering Fraudulent Payments

• WATCH Republican Leader Rep. Kevin Brady’s (R-TX) opening remarks: Brady: Dems Ignored Unchecked UI Fraud and Thousands of American Taxpayer Victims

• WATCH Worker and Family Support Republican Leader Rep. Jackie Walorski’s (R-IN) opening remarks: Walorski: Billions Lost to UI Fraud at Stake, so Why Won’t Democrats Act?