A government watchdog has flagged nearly $1 billion in unemployment benefits from the pandemic that may fall prey to fraud.
The U.S. Department of Labor’s Office of Inspector General highlighted issues with prepaid debit card benefits and the state’s Office of Unclaimed Property, as reported by a recent article.
The Inspector General, Anthony P. D’Esposito, warned that if no measures are taken, U.S. taxpayers could lose about $912 million.
According to the announcement, an analysis of 6.5 million prepaid debit cards used for unemployment insurance revealed that $720 million remains on unused cards, including some accounts with over $76,000 each. Additionally, $192 million has already been sent to the state’s Office of Unclaimed Property.
There have been numerous fraud incidents tied to pandemic-related benefits, particularly noted in China.
The same outlet reported that Maryland had returned $520 million in payments that were deemed “allegedly fraudulent” back in August.
DOL Secretary Lori Chavez Delemer mentioned the recovery efforts are a result of a joint initiative involving the Office of Inspector General, the Employment and Training Department, and Maryland’s Labor Department.
A statement indicated that the agency had become a major target for fraudsters during COVID-19, as both domestic and international criminals executed various identity theft schemes to claim unemployment benefits.
In another report from February 7, it was noted that the U.S. Small Business Administration had put a hold on over 111,000 borrowers in California and is trying to recoup more than $8 billion tied to suspected fraudulent pandemic aid.
“I’ve warned that if we don’t act quickly, nearly $1 billion in improperly claimed funds could be lost by American taxpayers. This is taxpayer money and it needs to be dealt with right away. We’ve done the investigation and found the money, so any delay is unwarranted. The only acceptable outcome is to return this money to the American public,” D’Esposito stated in a social media update. He added, “Fraud is essentially a tax on every American.”
