The Labor Department’s Inspector General has updated its estimates of fraud in pandemic-era unemployment benefits, and it’s hard to know what’s worse: the shoddy systems that allowed crooks to bilk taxpayers, or the Biden Administration’s refusal to do anything about it.
The IG first alerted Labor to the scope of the problem with reports in February and June last year, identifying $16 billion in potentially fraudulent payouts to large and small operators of unemployment scams. A new IG memo last week identifies $30 billion more in fraudulent payments—for a total of $45.6 billion. That’s three times what the U.S. has spent to help Ukraine fend off Russia.
The various benefit scams are well-known, and the IG revised upward the tallies of each category. Individuals who fraudulently claimed benefits in more than one state got away with $29 billion. Con artists who used suspicious email services designed to hide identities have claimed at least $16 billion. Swindlers using the Social Security numbers of ineligible federal prisoners and dead Americans landed some $400 million more.
The IG blames the growing numbers on the Labor Department’s Employment and Training Administration (ETA), which is responsible for unemployment benefits. The memo says the IG in February 2021 identified high-risk areas and recommended ETA work with state agencies to develop fraud controls, as well as coax Congress to pass legislation requiring state agencies to cross-match high-risk areas.
Yet 19 months later, the memo reports, “ETA has not taken sufficient action” which “significantly increases the risk of even more [unemployment] payments to ineligible claimants.”