U.S. Sen. John Thune (R-S.D.), a member of the Senate Finance Committee, today joined several of his Republican colleagues in introducing legislation to recover funds from unchecked unemployment fraud and provide incentives for states to recover fraudulent payments. The bill would jumpstart efforts to claw back federal funds and pursue recovery of fraudulent payments by ensuring aggressive identification, investigation, and prosecution of criminal fraud in pandemic unemployment programs.
“South Dakotans expect that their hard-earned tax dollars are being spent wisely,” said Thune. “Unfortunately, billions of dollars of fraudulent payments have been made through pandemic-related unemployment insurance programs since the onset of the COVID-19 pandemic. This commonsense legislation would incentivize states to recover these stolen taxpayer dollars and help ensure these fraudsters are held accountable.”
The legislation was led by U.S. Sens. Mike Crapo (R-Idaho), ranking member of the Senate Finance Committee and Rob Portman (R-Ohio), ranking member of the Senate Homeland Security and Governmental Affairs Committee. It was co-sponsored by U.S. Sens. Marsha Blackburn (R-Tenn.), Mike Braun (R-Ind.), Bill Cassidy (R-La.), Susan Collins (R-Maine), Steve Daines (R-Mont.), Deb Fischer (R-Neb.), John Kennedy (R-La.), Roger Marshall (R-Kan.), Jim Risch (R-Idaho), Mitt Romney (R-Utah), and Pat Toomey (R-Pa.).
Last year, Thune introduced the Recovering Fraudulent Claims Act, legislation that would establish the COVID-19 Unemployment Insurance Fraud Task Force to investigate alleged instances of fraud in the COVID-19 unemployment insurance programs that have since expired. The bill would also require the task force to report back to Congress on its findings and provide insight into the amount of fraudulent unemployment insurance payments that have been recovered since the establishment of these programs and the number of individuals who have been prosecuted since the start of the COVID-19 pandemic.
The White House estimated that 19 percent of total COVID-19 unemployment insurance payments were lost to fraud, which amounts to roughly $80 billion on the low end. By contrast, the U.S. Department of Labor’s estimate puts that number much higher. In May 2022, the Washington Post reported that an estimated $163 billion was siphoned away by fraudsters and that if the government’s best estimate is accurate, only 2.4 percent of wrongful payments have been recovered.