Malliotakis: $11 Billion in New York Unemployment Fraud "Absolutely Unacceptable"

(WASHINGTON, DC) - Today Congresswoman Nicole Malliotakis (NY-11), a member of the House Committee on Ways & Means, 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.

"We've heard today of the massive figures of improper unemployment payments, many fraudulent, which could be as high as $400 billion dollars," Malliotakis said. "My home state of New York, unfortunately, but not surprisingly, ranks near the top of the list with an estimated $11 billion in fraudulent unemployment payments. These taxpayer dollars went to fraudsters - many overseas, as far away as China, Russia, and Nigeria - who bought luxury cars, condos, watches, and designer goods. One person even received $1.5 million over a span of 10 months. This is absolutely unacceptable and I'm glad to hear that there's bipartisan support to crack down on this and we must do what we can to recoup this money."

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

The Department of Labor Office of the Inspector General (DOL-OIG) has estimated $165 billion in improper payments have been made through pandemic unemployment programs, with outside groups estimating it could be as high as $500 billion. 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 added: "To make matters worse, my district offices in Staten Island and Brooklyn worked with dozens of constituents who've had their identities stolen and could not get the unemployment benefits that they desperately needed. Because the Department of Labor in New York failed to prevent fraud at the outset of the pandemic, the unemployment insurance trust fund was drained, and for the last two years, the state has had an outstanding loan to the tune of $8 billion from the federal government. If this loan remains unpaid, the cost will be handed down to our already struggling small business through increases in unemployment insurance taxes for each employee on their payroll."

In coordination with Congress, the U.S Government Accountability Office (GAO) and the DOL-OIG have proposed several recommendations to establish more oversight and increase the integrity of government programs, including but not limited to:

• Extending the statute of limitations for the Department of Justice to investigate and prosecute fraud from five to ten years.
• Establishing a permanent analytics center of excellence to aid the oversight community in identifying improper payments and fraud.
• Requiring federal agencies to report their antifraud controls and fraud risk management efforts in their annual financial reports and implement corrective action plans if necessary.
• Passing legislation requiring State Workforce Agencies to cross-match unemployment insurance claims in high-risk areas, including individuals with Social Security numbers: filed in multiple states, of deceased persons, of federal prisoners, and with suspicious email accounts.

WATCH MALLIOTAKIS' REMARKS HERE