Formation of Fraud Eradication Task Force
It’s now been almost two months since President Trump took significant action by establishing the Fraud Eradication Task Force.
In this short time, we’ve uncovered fraud amounting to tens of billions of dollars in taxpayer resources, initiated prosecutions of numerous individuals involved, and halted billions in questionable payments.
And, honestly, this is just the beginning.
Our message is clear: if you’re defrauding American taxpayers, we will find you and take you to court.
This progress raises some important questions. Why did it take so long for the government to tackle this issue? The answer lies in a new strategy that Federal Trade Commission Chairman Andrew Ferguson and I are implementing.
Before President Trump assumed office, federal anti-fraud efforts primarily relied on a “pay-and-chase” method. Federal agencies, like the Department of Health and Human Services, would issue payments and then, only later, investigate for fraud. Prosecution would often only occur if the fraud involved significant amounts.
This approach is ineffective and, not surprisingly, has been exploited. Each year, the U.S. loses about $250 billion to fraud, yet only around $10 billion gets recovered. So, just paying first and chasing later clearly won’t solve the problem.
Our revised strategy is rooted in close cooperation. We are coordinating all federal anti-fraud initiatives from the White House. Instead of addressing fraud in an uncoordinated way, our task force is focusing on targeted programs that spend heavily but lack adequate fraud prevention measures. Thanks to this approach, we’ve already unearthed significant fraud cases in various federal programs.
For instance, Kelly Loeffler from the Small Business Administration has demanded $22 billion be recovered from fraudulent loans. At the Department of Education, Linda McMahon spotted $1 billion in fraudulent loans taken out by “ghost students.” Meanwhile, Brooke Rollins at the Department of Agriculture found 14,000 owners of luxury cars in just one state who were receiving SNAP benefits.
But we don’t stop at just identifying scammers; we’re also intensifying federal prosecutions. This isn’t just about justice for taxpayers; strong enforcement holds fraudsters accountable and discourages further fraud.
Our stance is simple: “No fraud is too big or too small to prosecute.” If you’re defrauding American taxpayers, we will track you down and bring you to justice.
To facilitate this, we’ve established a new Fraud Unit within the Department of Justice, led by Assistant Attorney General Colin McDonald.
In just two months, the unit has executed 22 search warrants at fraudulent child care centers in Minnesota, like Quality Learning Center. Additionally, in Los Angeles, a crackdown on Medicare fraud has resulted in sentencing individuals responsible for over $50 million in theft, with sentences spanning multiple years.
Scammers nationwide are now on high alert.
We’ve also instructed states to halt deals and prosecute fraudsters tied to federal programs under their jurisdiction. A letter was sent to all 50 state governors urging them to utilize their resources to identify and bring fraudulent activity in their Medicaid programs to justice.
Alongside vigorous prosecution, the task force is engaged in prevention, ensuring that taxpayer funds aren’t released without confidence in their legitimacy. Agencies are now expected to verify payments thoroughly before distributing funds.
This methodology is already yielding positive results in Medicare, one of the largest federal initiatives. Dr. Mehmet Oz pointed out roughly 800 fraudulent hospice and home health service providers and withheld payments for dubious services. So far, we’ve saved about $1.4 billion in potentially fraudulent payments and have suspended the enrollment of problematic providers.
This strategy is effective and will be extended to other federal programs. The old “pay-and-chase” strategy is no longer viable. It’s time to stop the influx and litigate instead.
