Government Watchdog Finds $60 Billion in Pandemic Unemployment Fraud, Suggests Maybe Doing Something About It

In the year after the COVID-19 pandemic reached the U.S., Congress passed $6 trillion in spending to address it. Of that amount, it apportioned hundreds of billions of dollars to expand unemployment benefits. As a result of the emergency situation, the benefits were particularly generous, offering some laid-off workers as much as triple the amount normally paid by unemployment insurance (U.I.).

A report from the Government Accountability Office (GAO) made public this week found “substantial levels of fraud” in the program. More notably, it indicated that the government lacks a real strategy for dealing with the problem.

Each state administers its own U.I. program, and the U.S. Department of Labor (DOL) ensures that states comply with federal standards. According to the GAO report, Congress established four new U.I. programs during the pandemic that collectively paid out over $878 billion between April 2020 and September 2022, all of it meant to supplement state U.I. benefits.

Such a substantial infusion of cash created numerous opportunities for fraud and abuse. Applicants submitted falsified income or employment information; some fraudsters even used false identities altogether. The GAO notes that state agencies reported U.I. fraud during the pandemic totaling $4.3 billion. But the DOL’s inspector general identified another $45 billion in potential fraud that had not been investigated.

Using the DOL’s U.I. fraud estimates of between 7.6 percent and 8.6 percent, the GAO determined that total unemployment fraud during the pandemic could be over $60 billion. But notably, those fraud estimates a