Fraudsters stole $100B in government funds, they just got away with it

• The statute of limitations for COVID-19 relief crimes expired March 27. Anyone who stole funds and hasn’t been charged will now go unpunished.
• The Government Accountability Office estimates fraudsters stole between $100 billion and $135 billion.
• The Department of Labor said only $5 billion has been recovered.

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Thousands of fraudsters who collectively stole more than $100 billion in COVID emergency unemployment assistance just got away with it. The statute of limitations for pandemic aid crimes expired on March 27, and Congress failed to approve an extension. 

The Government Accountability Office estimates that $100 to $135 billion was lost to fraud during the pandemic, and only $5 billion has been recovered.

Law enforcement agencies had thousands of pending cases. The Department of Justice alone had more than 1,600 criminal matters that were open and uncharged.

Did Congress try to buy more time?

The House approved a bill on March 12 that would have doubled the statute of limitations from five to 10 years, giving prosecutors until March of 2030 to bring criminals to justice. The Senate did not vote on it.

One of the bill’s sponsors urged Congress to move quickly because, as he explained, once the statute expires, it’s too late. 

“We cannot retroactively change criminal liability for federal crimes,” Rep. Darin LaHood, R-Ill., said. “Once the statute of limitation expires these cases will go cold and criminals will go unpunished” 

“Prosecuting bad actors has a ripple effect that will deter crime and prevent additional losses to the government and American taxpayers,” LaHood continued.  

How did fraudsters steal more than $100 billion?

Stealing from relief funds is relatively easy due to what one expert described as the government’s “pay and chase” method. Agencies work to get aid out as quickly as possible, so they don’t properly verify identification and miss red flags in a flood of claims. 

This makes government programs a target for criminals. 

“They never run out of money, and you likely won’t be arrested,” Haywood Talcove, CEO of LexisNexis Risk Solutions, said. 

Talcove shared how criminal organizations use stolen personal information to file claims on behalf of real people. He said the government needs to implement stronger identity verification and end self-certification, allowing recipients to confirm their own eligibility. 

“If we fail to act, we are complicit in funding fraudsters, organized criminals, nation states and even terrorists who use these programs as their personal checking accounts,” Talcove told Congress. 

Who is behind the largest instances of fraud?

While some individuals steal for themselves, the bigger problem is organized crime on an international scale.

Expert analysis found that up to 70% of fraudulent unemployment benefits went to Russian mobsters, Chinese hackers and Nigerian scammers. The DOJ recently announced that a man pled guilty to laundering $59 million in public benefits to China. Some funds were also traced to North Korea’s nuclear weapons program.

Talcove warned it’s not just COVID funds; it’s all disaster relief.

Scammers are using the real identities of California wildfire victims and Florida hurricane victims to apply for benefits that they wire out of the country to evade law enforcement.