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September 26, 2022

Pandemic Unemployment Fraud Tab: $45.6 Billion

This new estimate likely blows the old estimate out of the water.

As we have written before, the amount of COVID relief fraud is astronomical. Last week, The Wall Street Journal reported that $45.6 billion alone was taken in unemployment schemes. “The new tally,” the Journal says, “is nearly three times last summer’s estimate of over $16 billion in fraudulent payments.”

This huge new estimate comes on the heels of two bigger COVID fraud stings.

In Minnesota, 50 fraudsters were brought to justice for a nonprofit scheme costing $250 million. The alleged nonprofit, Feeding our Future, exploited a government-funded child nutrition program by claiming to feed hungry children but pocketing the money instead. Minnesota Attorney General Keith Ellison said: “The fraudsters took advantage of the generosity of the American people. That’s wrong. That’s reprehensible. That’s why they’re facing criminal indictments. That’s why they’re going to be held accountable for what they did and were glad we’re able to play a role in providing the investigation needed to hold them accountable.”

In Chicago, three residents were apprehended for small business loan schemes. They were involved in wire fraud and money laundering. In total, they stole $2.75 million. That money was used to purchase real estate and luxury vehicles.

The amount of fraud and the varying ability of criminals to get their hands on taxpayer dollars is astounding. If the $45.6 billion in unemployment fraud is three times the original estimate, one can only assume that the overall fraud estimate — which The Washington Post has stated was about $163 billion — isn’t accurate either. In a memo sent from the Assistant Inspector General for Audit in the Department of Labor, Carolyn R. Hantz emphasized, “Despite the OIG’s [Office of Inspector General] continued efforts to identify potentially fraudulent payments to ineligible claimants, we continue to experience delays in obtaining the needed unemployment insurance data.”

The biggest question the American people are left asking is this: Why has it taken so long to discover the amount of fraud — one whose numbers continue to bubble alarmingly?

Theories for this oversight include inadequate technology — in the case of unemployment, there was insufficient digital infrastructure to keep track of who was dead, in prison, or using a stolen social security number. Others claim that they were overwhelmed by the sheer amount of fraud increase. The Wall Street Journal states that misspent government money in terms of unemployment rose exponentially from 9% pre-pandemic to 19%. These excuses all ring hollow in the face of the daunting amount of money that was stolen from the American people.

If this administration has its way, it would love to pass through even more COVID relief money with Congress’s approval (another $22 billion) for supposedly better vaccines and other purposes.

Seems like a funny thing to be pushing for when Joe Biden just declared correctly that “the pandemic is over.”

Update The extent of fraud is not yet known but the Department of Labor alone now estimates almost $200 billion in fraudulent payments for unemployment benefits.

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