Report: $163B of Pandemic Unemployment Benefits Lost in Fraud, Waste

COVID-19 pandemic unemployment benefits wound up being a "a magnet for rip-off artists," as identity thieves capitalized on rushed benefits the government was not geared up for in a pinch, The Washington Post reported Sunday.

An estimated $163 billion in pandemic-related benefits were fraudulently received, according to the Labor Department.

Just $4.1 billion of that has been recovered, only 2.4% of the estimated stolen, raising concern the government is not going to get most of it back.

"The unprecedented explosion of unemployment claims, combined with years of disinvestment in our unemployment system, lack of state-by-state data sharing and weak identity controls, created a perfect storm for the fraud and identity theft in 2020 that we inherited," adviser to President Joe Biden, Gene Sperling, told the Post in a statement.

The level of fraud is so prevalent, the $163 billion might be on the low end, according to the report.

"It's obviously substantial," U.S. Secret Service's Roy Dotson, the national pandemic fraud recovery coordinator, told the Post. "I can't really get into the number.

"We're all trying to figure that out."

Democrats and the Biden administration are blaming the underfunding of the government in the failure to execute their social programs, calling it a "perfect storm" of fraud capitalizing on the supply of pandemic funds, according to the report.

"Those outdated systems are just a magnet for rip-off artists and the fraudsters," Sen. Ron Wyden, D-Ore., said to the Post.

Justice Department inspector general Michael Horowitz said the government just cannot keep up with this level of widespread fraud.

"The ability to engage in identity theft has grown exponentially and the federal government has not kept up," Horowitz, chief of the Pandemic Response Accountability Committee, told the Post.

• Congressional Subcommittee Expands Probe Into Pandemic Aid Fraud
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