U.S. fraud losses exceed $233 billion annually

11:45 19.04.2024 •

The U.S. government may lose between $233 billion and $521 billion to fraud each year, according to a rough federal estimate, the first of its kind, released Tuesday, ‘The Washington Post’ informs.

But the author of that report — the nonpartisan Government Accountability Office — simultaneously cautioned that its new figure is incomplete and imprecise because of a lack of reliable data and the inherent challenge in uncovering sophisticated schemes to steal federal funds.

The watchdog, known as GAO, computed its estimate by studying the federal budget between the 2018 and 2022 fiscal years, spanning the Trump and Biden administrations and the beginning of the coronavirus pandemic, when Democrats and Republicans alike provisioned historic aid that scammers repeatedly targeted.

With the aid of a complicated economic model, GAO computed that fraud in past years may have reached as high as 7 percent of federal spending, with the highest spikes probably coinciding with the past abuse of coronavirus relief funds.

Citing the country’s fiscal health as “unsustainable,” the report called for significant reforms that “can reduce the loss of federal dollars and help improve the federal government’s fiscal outlook.”

The new report is still likely to rile Capitol Hill, where fiscal hawks from both parties have long lamented the scourge of federal waste, fraud and abuse — even if they have done very little to address the root causes of the problem. GAO repeatedly has asked Congress to adopt some basic reforms that might improve federal spending data and bolster the government’s ability to spot scams, but Democrats and Republicans often have ignored the requests.

Underscoring the problem, the Justice Department announced last week it had brought charges against more than 3,500 defendants, and secured the seizure or forfeiture of more than $1.4 billion, in connection with illegally obtained coronavirus relief funds since 2021. Endorsing new anti-fraud legislation, Attorney General Merrick Garland added that the government’s work is still “far from over.”

The first-of-its-kind analysis, based on spending between 2018 and 2022, follows a week after the White House endorsed new legislation to crack down on fraud including identity theft.


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