A government watchdog agency found that about 15% of all unemployment benefits from the government have been claimed illegally since the beginning of the COVID-19 pandemic. That equates to around $135 billion of the $900 billion in benefits paid from April 2020 to May 2023.
The watchdog’s revelation points to a flawed expedited process with little oversight in paying unemployment benefits as claims increased during the pandemic.
The federal government focused on extending and expanding government assistance relief to make it easier for Americans who lost their jobs due to COVID-19 to apply for and receive benefits. But the rollout of new relief increased the risk of fraudulent claims. Officials in the Government Accountability Office said it is impossible to know the full extent of the fraud.
The investigation concluded the federal government wrongfully paid about 15% of claims. The Labor Department disputes the watchdog’s report and conclusion, questioning the study’s methodology and asserting that it overstated the level of fraud.
The federal government has been heavily scrutinized for the amount of taxpayer money that went to fraudulent schemes for COVID-19 relief.
The Justice Department had a three-month-long sweep of over 50 U.S. attorney’s offices and dozens of federal, state and local law enforcement agencies.
In August, department officials revealed that the federal government charged 3,195 defendants for pandemic fraud-related charges, seizing over $2.4 billion in COVID-19 relief funds.
More than $200 billion in relief loans and grants were also fraudulently spent. According to the Inspector General for the Small Business Administration, Hannibal “Mike” Ware, that’s almost 20% of all loans disbursed during the pandemic from March 2020 to January 2022.
