Being good stewards of taxpayer dollars is a key focus of federal employees. Doing so means not only watching how their agency spends money, but also how citizens at large are using government funds. Fraud prevention needs to be a core competency of any agency that issues funds for use by citizens or private sector organizations. This includes government entitlements, health benefits, grants, and more.
The monetary cost of fraud is hard to measure, with some estimates placing annual losses as high as $521 billion. Fraud also wears away at trust, which makes it harder to get funding for legitimate needs and makes those who truly need assistance hesitant to apply for it.
While fraud has always existed, there’s been an increased focus on its harms following the COVID-19 pandemic. When quickly assembled, very necessary aid programs are taken advantage of by professional scammers and other bad actors. A Labor Department report found that nearly 36% of the spending on the Pandemic Unemployment Assistance went to improper payments.
Spurred by pandemic-era fraud and powered with increased use of artificial intelligence, agencies across government are stepping up fraud-prevention efforts.
COVID Recovery Includes Fraudulent Claim Recovery
As of April 2024, the Department of Justice had seized over $1.4 billion in stolen funds and charged over 3,500 defendants with crimes related to COVID-19 relief fraud. This, unfortunately, is only a fraction of suspected fraudulent activity related to these relief efforts. Artificial intelligence (AI) is proving to be a key tool in helping agencies, including but not limited to the Small Business Administration, IRS, Social Security Administration, and Department of Labor, discover COVID-19 relief fraud and recover improper payments. AI can identify connections that may not be immediately clear during human reviews. For example, a single person may have claimed benefits under a number of pseudonyms. AI can spot patterns between seemingly unrelated accounts, by identifying and connecting different formatting of the same name, address, or contact information.
Targeting Scammers
A Federal Trade Commission report found that veterans reported losing $350 million as a result of fraud in 2023 alone. The Department of Veterans Affairs (VA) is implementing programs aimed at stopping people looking to scam or defraud veterans. In the summer of 2024, the VA launched a website and call center to help inform veterans and their families of common fraud schemes, give them tools to protect themselves, and provide an outlet for reporting and gaining further assistance. The VSAFE program consolidates fraud prevention and education efforts across various VA benefit programs that bad actors target.
Teaming Up to Fight Fraud
The Departments of Labor and Treasury have joined forces to combat unemployment insurance (UI) fraud. This data-sharing effort will give state agencies that administer UI access to the UI Integrity Data Hub, a centralized, multistate data-matching system that highlights identified fraudsters. This expanded access to “Do Not Pay” lists allows agencies to focus on getting legitimate payments out faster by making it easier to spot questionable claims.
Measuring the Fraud Fight
To measure the success of programs like these, the House Oversight and Accountability Committee is developing a scorecard that will “assess the progress of key government spending programs in reducing fraud and improper payments.” Lawmakers hope the scorecard will allow them to better see progress in both measuring and combating fraud across government.
For more insight into government fraud prevention, check out these resources from GovWhitePapers and GovEvents:
- Securing the Future: Strategies for Fraud Monitoring and Prevention (white paper) – Since the earliest days of government, the fundamentals of public records and the need for security have remained constant. Yet the methods and strategies to achieve this security have not always evolved with the changing threats governments face. This issue paper focuses on a crucial aspect of ensuring this security: fraud monitoring and prevention.
- Identity Fraud Report 2024 (white paper) – This report shares the unique fraud trends organizations see during digital account onboarding and offers insights on how to tackle them.
- State and Local: Making an Impact (white paper) – This guide includes nine examples from state, county, municipal, and tribal governments where change has had a direct positive impact on constituents, whether they are seeking unemployment benefits, flood warnings, or a loading zone.
- AI Summit (November 7, 2024; Reston, VA) – AI is poised to make a tremendous impact on federal government systems and the workforce for its ability to save time and money. In the face of this reality, agencies are strategizing how to get on board with the technology while integrating it responsibly.
- The Consumer Sentinel Network: A Law Enforcement and Public Reporting Tool for Scams and Identity Theft (March 11, 2025; webcast) – The Consumer Sentinel Network (Sentinel) is a unique investigative cyber tool that provides law enforcement members with access to millions of consumer fraud and identity theft complaints. This event will discuss how to access such data as well as how to advise consumers who are victims of consumer fraud and identity theft.
Explore GovWhitePapers and GovEvents for more details on how the government is combating fraud.
