First appeared on FOX: The House Oversight Committee reported that American taxpayers have lost more than $100 billion to fraud and improper payments as a result of the temporary unemployment insurance program created in response to COVID-19.
Fox News Digital obtained the House Oversight Committee report following a months-long investigation looking into fraud in the Pandemic Unemployment Relief Program.
The report details information, documents and communications obtained by the committee that show how states across the country, including California, New York and Pennsylvania, processed and administered pandemic-related unemployment insurance claims with “minimal oversight.”
The committee said the lack of oversight meant “billions of dollars of taxpayer money lost through improper and fraudulent payments will likely never be recovered.”
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The committee concluded that 11% to 15% of total benefits paid during the pandemic were fraudulent, totaling $100 billion to $135 billion. The Department of Labor's Office of Inspector General estimates that at least $191 billion in pandemic unemployment claims may have been improperly paid, “with a significant proportion being fraudulent.”
A person walks past a store with a sign encouraging people to wear masks on Oak Street in Copiague, New York, on May 18, 2022. (Steve Forst/Newsday RM via Getty Images)
The commission found that the state only recovered about $6.8 billion.
The committee also concluded that benefit recipients “do not have to provide evidence that they are actively seeking work in order to continue receiving benefits.”
During the program's first nine months, applicants weren't required to provide proof of income, which the committee noted made the program vulnerable to fraud. After Congress reauthorized the program in December 2020, states began requiring applicants to provide proof of prior employment and wages.
The Department of Labor reported that the total rate of improper payments in the program was 35.9 percent.
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House Oversight and Accountability Committee Chairman James Comer (R-KY) speaks during a hearing with FDA Commissioner Dr. Robert Califf at the Rayburn House Office Building in Washington, DC, April 11, 2024. (Anna Moneymaker/Getty Images)
In March 2021, the Biden-Harris Administration extended the Pandemic Unemployment Insurance program and benefits for another six months, even as states and businesses were reopening and vaccinations were underway.
The commission concluded that “due to labor shortages, 26 states have chosen to terminate federal benefits early, citing that exorbitant federal benefits are contributing to labor shortages in their states.”
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But the commission also found that organized crime “played a significant role” in unemployment insurance fraud, exploiting vulnerabilities in the existing system.
“Foreigners, organized crime groups, prison inmates, and their agents submitted fraudulent claims in multiple states,” the report states. “Insider actors, including those working for state workforce agencies, conspired with organized crime groups and other individuals to defraud state unemployment insurance programs, while states did little to stop them.”
House Oversight Committee Chairman James Comer (R-Ky.) condemned the misconduct, saying Democrats and the Biden-Harris administration “spent trillions of dollars under the guise of pandemic relief.”
People line up to get tested for coronavirus in Washington, DC, in December 2021. (Ting Sheng/Xinhua via Getty Images)
Comer said during the committee's first hearing on the issue that unchecked spending had left taxpayer funds, including the unemployment insurance program, vulnerable to significant waste, fraud and abuse.
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“While Democrats turned a blind eye to the waste of taxpayer money, Republicans were hell-bent on finding out how taxpayer funds had become prey for con artists and criminal enterprises,” Comer said.
Comer said the committee's report includes recommendations to ensure future taxpayer-funded unemployment insurance programs “do not suffer a similar fate.”
“Rooting out waste, fraud, abuse and mismanagement in the federal government remains a top priority for Watchdog Republicans, and we will continue to work to protect all American taxpayers,” Comer said.
The committee recommended that future unemployment insurance benefit programs should require the government to require applicants to provide proof of employment before assessing their eligibility.
“Unemployment insurance should always be linked to work,” the report states.
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The committee also recommended that future programs “require state workforce agencies to cross-verify claimants” across federal databases, including the federal prisoner database.
Meanwhile, the committee recommended that Congress consider extending the statute of limitations for fraud programs related to the Pandemic UI program, which expires in March 2025, so that criminals who defraud taxpayers can be brought to justice.
