Fraudsters likely stole at least $60 billion in pandemic unemployment benefits

The report arrived one week before the House GOP intends to launch an investigation into pandemic-related benefits fraud.

United States Department of Labor in Washington, DC (Shutterstock)

(Daily Caller News Foundation) — Over $60 billion of pandemic-related unemployment benefits were likely paid out to fraudsters between April 2020 and December 2021, the Government Accountability Office (GAO) reported Monday.

This is likely an underestimate, however, since it was made using the Department of Labor’s lower-bound estimate for typical fraud rates, at 7.6%, applied to the roughly $849 billion in pandemic benefits paid out between April 2020 and December 2021, according to the GAO. The agency also rounded down their results to the nearest $10 billion, and cautioned that the actual amount of fraudulent payments could be “substantially higher.”

In September, the Department of Labor’s Office of the Inspector General (OIG) announced that 1,000 people had been charged in connection with over $45 billion in fraudulent pandemic-related unemployment payouts.

Department of Labor (DOL) staffers were overwhelmed by over 57 million initial unemployment claims within the first five months of March 2020 — when pandemic relief programs were first implemented — with some fraudsters successfully getting paid despite using the Social Security numbers of dead people and federal prisoners to apply for aid. While the DOL has since taken some steps to combat fraud, the agency’s approach was “ad hoc,” the GAO reported.

The GAO recommended in October 2021 that the DOL implement an antifraud strategy based on the watchdog’s Fraud Risk Framework, according to the report. Despite this, the agency had not implemented an antifraud strategy in line with the GAO’s risk framework as of December, DOL acting assistant secretary Brent Parton said in a statement included alongside the GAO report.

However, Parton pushed back on the necessity of such a framework, arguing in the statement that the DOL has an “[Unemployment Insurance] Integrity Strategic Plan … Many of the strategies directly address identified fraud risks in the [Unemployment Insurance] program.”

The report arrived one week before the House GOP intends to launch an investigation into pandemic-related benefits fraud, CNN reported. Republican Rep. James Comer of Kentucky is set to chair the House Oversight Committee, which is set to host a hearing on the “rampant waste” in COVID-19 relief.

The DOL did not immediately respond to a Daily Caller News Foundation request for comment.


John Hugh DeMastri