WASHINGTON — Nearly $1 billion of COVID-19-era unemployment benefits is sitting unused and ripe for fraud, the Labor Department’s official watchdog has warned.
The department’s Office of Inspector General (OIG) found that some $720 million in unemployment insurance benefits are sitting on prepaid debit cards, while another $192 million has been moved to state unclaimed property offices.
“My office has warned that, absent swift action, US taxpayers risk losing nearly a billion dollars in fraudulently obtained benefits,” Inspector General Anthony D’Esposito said in a statement last week.
“This is taxpayer money—and it demands immediate attention. We’ve done the investigative work. We’ve identified where the money is. There is no excuse for delay, and no acceptable outcome other than returning these dollars to the American people.”
One of the prepaid debit card accounts in question holds around $76,000, according to D’Esposito’s office.
Most states allow residents to receive unemployment benefits via a prepaid debit card system, precluding the need for a bank account or to give personal info to Uncle Sam. Direct deposit and paper checks are also options, depending on the state.
D’Esposito’s team urged the Labor Department’s Employment and Training Administration, which oversees unemployment insurance benefits, to send guidance to states on how to recover the funds.
“Fraud isn’t a victimless crime. Every dollar stolen is a dollar that families don’t have for groceries, rent, health care, or gas. When we root out fraud, we protect taxpayers and lower the real cost of living,” the former Republican congressman added in a statement.
The Post reached out to the Employment and Training Administration for comment.
The watchdog finding came after investigators analyzed some 6.5 million prepaid debit cards that were used to dole out benefits during the COVID-19 pandemic.
Thus far, the OIG’s work has led to 1,800 convictions, 2,300 people charged, and $2.2 billion in recovered funds.
Six years after COVID-19 upended the world, the feds and private analyses have unearthed hundreds of billions of dollars worth of potential fraud stemming from pandemic relief measures.
The Small Business Administration, for example, found last year that it had disbursed up to $200 billion in “potentially fraudulent loans” across its pandemic relief programs.
D’Esposito, a former NYPD detective, has been pushed by Long Island Republicans to challenge Democrat Laura Gillen for his old seat representing part of Nassau County.
So far, D’Esposito has been noncommittal about a run with Democrats favored to take back the House in the November midterms.