House Ways & Means Passes Solutions to Combat & Prevent Unemployment Fraud, Recover Billions in Stolen Funds

(WASHINGTON, DC) - Today, the House Committee on Ways and Means, of which Congresswoman Nicole Malliotakis is a member, passed H.R.1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act, as a follow-up to testimony gathered at a hearing earlier this month. The legislation extends the statute of limitations for prosecuting fraud, incentivizes states to investigate and recover fraudulent unemployment insurance (UI) payments, and utilizes data-matching systems to prevent future fraud.

"In our first committee hearing earlier this month, we heard about the massive figures of improper unemployment payments which could be as high as $400 billion dollars," Congresswoman Nicole Malliotakis said. "When taxpayers needed assistance, their hard-earned tax dollars were being stolen by foreign fraudsters, adversaries, and international criminal organizations who bought luxury cars, condos, watches, and designer goods. For two years, the Biden Administration and Congressional Democrats ignored our requests to implement oversight of pandemic relief aid, leaving the American people in the dark. This passage of this bill out of committee today brings Congress one step closer to improving the integrity of our relief programs, preventing future fraud, and pursuing justice against criminals who stole hundreds of billions of dollars from taxpayers."

Specifically, the Protecting Taxpayers and Victims of Unemployment Fraud Act:

• Allows states to keep 25 percent of recovered fraudulent overpayments of federal funds.
• Allows states to use recovered funds to improve program integrity and fraud prevention.
• Allows states to keep five percent of state UI overpayments, conditioned on meeting data matching integrity conditions and dedicating those funds to preventing future fraud.
• Extends the statute of limitations for criminal charges or civil actions from five to ten years.

BACKGROUND:

The Department of Labor Office of the Inspector General (DOL-OIG) has estimated $191 billion in improper payments have been made through pandemic unemployment programs, with outside groups estimating it could be as high as $400 billion, nearly half of the $878 billion in unemployment benefits claimed. DOL-OIG has opened more than 31,000 investigative matters involving alleged unemployment fraud, resulting in more than 1,000 individuals being charged with crimes.

Malliotakis has previously highlighted the egregious lack of oversight and investigation into the waste, fraud, and abuse of tax dollars in federal unemployment programs during the pandemic, particularly in New York State which is estimated to have paid $11 billion in fraudulent unemployment benefits since March 2020.

Fraudsters in New York State have spent federal unemployment funds on:

• $40,000 on an 18-carat gold Rolex watch
• $50,000 in furnishings for a luxury condominium
• $37,000 in designer goods at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin, and Yves Saint Laurent
• $3.5 million on a mansion in Franklin Lakes, New Jersey, and a chartered jet service to provide transportation to and from
• $10 million on a villa in the Dominican Republic
• Luxury vehicles, including a 2018 Porsche 911 Turbo, a 2017 Ferrari 488 Spider, a 2017 Bently Continental GT, a BMW 750, and a 1962 Mercedes Benz 190