New Legislation Targets Federal and State Fraud
When Congress reconvenes on Monday, they will confront three key pieces of legislation designed to address fraud at both federal and state levels.
The proposed bills focus on enhancing data-sharing between local and state governments while also establishing a new position for an assistant attorney general dedicated to leading the Justice Department’s (DOJ) initiatives against fraud. Reports indicate that fraudsters in the U.S. have misappropriated or abused funds from various government initiatives, like the Supplemental Nutrition Assistance Program (SNAP) and COVID-era assistance programs aimed at providing meals for children.
“Fraudsters have pilfered billions from taxpayer-funded programs designed to assist those in need, all while Democratic leaders have turned a blind eye,” stated House Majority Leader Steve Scalise. “With the introduction of these three bills, the House responds to Vice President [J.D.] Vance’s appeal for Congress to back the invaluable work of the White House Task Force aimed at eliminating fraud. We’re bringing accountability to those trying to deceive the American public.”
The National Fraud Enforcement Division Act of 2026 seeks to create an assistant attorney general responsible for overseeing DOJ efforts to investigate, prosecute, and rectify fraud affecting the federal government, its funded programs, and U.S. citizens. This position would manage multi-agency and multi-district fraud investigations, support state attorneys general’s offices on fraud matters, and set national enforcement standards regarding fraud.
Another piece of legislation, the “Protecting Taxpayers from Health Care Fraudsters Act,” aims to funnel resources to the Department of Health and Human Services (HHS), the Office of the Inspector General (OIG), and related agencies for the prevention of fraudulent health care payments. It proposes an increase in mandatory anti-fraud funding sourced from the Medicare Hospital Insurance Trust Fund, allowing the HHS’s inspector general to allocate resources for detecting and prosecuting health care fraud.
Special funding will be prioritized during the 2027 to 2030 fiscal years.
The Preventing Rip-offs and Obtaining Oversight of Funds (PROOF) Act is intended to bolster information-sharing between federal and state authorities regarding fraud detection and prosecution. It would mandate that governors furnish the U.S. attorney general with pertinent information required to investigate fraud in Medicaid, SNAP, the Coronavirus Relief Fund, and the Temporary Assistance for Needy Families (TANF) program.
In August, Vance stated the necessity for Congressional cooperation in implementing certain measures, particularly regarding data-sharing between various government levels.
“There are specific steps we must take that require Congress’s cooperation,” he expressed. “Foremost among these is data sharing. When examining our anti-fraud endeavors, one perplexing aspect is the opaque nature surrounding certain state programs.”
According to recent findings, Vance’s task force identified around $230 billion in suspected fraudulent activities, stopping about $55 billion in flagged payments.
Federal prosecutors have charged over 90 individuals in Minnesota for fraud, with more than 80 being identified as Somali. A local facility claiming to care for children was reportedly inactive despite its licensing.
In another case, 78 individuals were charged for allegedly stealing over $350 million from Feeding Our Future, a federal child nutrition initiative.
A staggering $280 billion in COVID-19 assistance is thought to have been stolen, coupled with another $123 billion that was wasted or misused. A report from June 2025 highlighted that about $400 billion of pandemic aid was improperly allocated using false or stolen Social Security numbers.
States indicated they had to replace over $320 million in stolen SNAP benefits between October 2022 and December 2024, as noted in a U.S. Government Accountability Office report. A Maryland resident received a 54-month federal prison sentence for orchestrating a SNAP benefits fraud scheme.
In a development last June, an Obama-appointed judge ruled that SNAP beneficiaries could use their benefits to buy unhealthy foods. The Secretary of Agriculture subsequently approved waivers that allow 23 states to restrict purchases of non-nutritious items like candy and soda.
“USDA is giving states greater flexibility in managing their programs by allowing these waivers, which are vital for ensuring taxpayer dollars support healthier options,” the USDA statement indicated.
Recently, the DOJ’s National Fraud Enforcement Division reported discovering around $350 million in alleged fraud in the southeastern states, including Alabama, Florida, and Georgia. These states have entered agreements for data-sharing with the division to enable access to essential public data.
The House has previously passed other legislation focused on combating fraud, including the Deporting Fraudsters Act of 2026 and the Stop Child Care Scams Act of 2026.
