Democratic lawmakers are lining up behind key Biden administration anti-fraud proposals, with a group of Senators unveiling legislation last week that includes key provisions to address systemic pandemic fraud and prevent future fraud schemes, and a key House lawmaker chiming in with legislation today.
Senate Majority Whip Dick Durbin, D-Ill., who chairs the Senate Judiciary Committee, along with Sens. Gary Peters, D-Mich., chairman of the Homeland Security and Governmental Affairs Committee, and Ron Wyden, D-Ore., chairman of the Senate Finance Committee, introduced legislation on April 10 to address historic levels of fraud within Federal funds that were distributed to help Americans through the COVID-19 pandemic.
House Oversight and Accountability Committee Ranking Member Rep. Jamie Raskin, D-Md., also introduced legislation today that would provide the government with tools to combat fraud in pandemic-related spending.
The Senators’ Fraud Prevention and Recovery Act includes key resources and programs that will strengthen efforts to recover stolen pandemic funds, hold bad actors accountable, and prevent identify theft.
The legislation also includes critical safeguards that will prevent future fraud and improper use of Federal relief funds.
The bill released last week coincides with the Biden-Harris administration’s three-part proposal unveiled in March 2023 asking Congress for $1.6 billion to help provide Federal agencies and local governments with more funding to handle pandemic-related fraud claims, modernize identity verification systems, and support victims of identity theft.
“During the pandemic, we saw a significant increase in fraud and identity theft,” said Sen. Durbin. “In line with President Biden’s historic efforts to address these issues, we introduced legislation to provide law enforcement with the tools necessary to identify the individuals responsible for fraud, prosecute them, and support the innocent victims. We must recover the funds stolen from the American people and bring to justice the perpetrators who committed this fraud.”
The lawmakers’ Fraud Prevention and Recovery Act would provide $250 million to the Small Business Administration and Department of Labor Offices of Inspectors General, ensuring they have the resources needed to identify and recover billions of dollars in fraudulent payments.
The bill would also further resource the Department of Justice (DoJ) with $300 million to “triple the COVID-19 Fraud Strike Force teams.”
These DoJ teams have been highly effective, seizing over $1.4 billion in stolen COVID-19 relief funds since the start of the pandemic. “This additional funding will ensure that the Department has the necessary resources to prosecute the full range of pandemic fraud, bring to justice the most egregious and sophisticated offenders, and recover additional stolen funds for the American people,” the bill’s fact sheet says.
The new bill would also enhance the Treasury Department’s ‘Do Not Pay’ service to the tune of $25 million, which empowers Federal agencies to detect and prevent improper payments. It would also provide the Social Security Administration with $75 million for privacy-preserving validation of key identity attributes.
Finally, the bill would provide $675 million to several Federal agencies to help prevent fraud and identity theft.
According to the bill, the funding would enable agencies to upgrade and modernize their identity verification and fraud prevention system; pilot an identity theft early warning system that will notify individuals when their identity information is used to access benefits programs; enhance IdentityTheft.gov by creating a one-stop remediation experience for victims; and provide grants for additional services for victims of identity theft.
“This bill would make big progress cracking down on identity fraud and criminal abuses of our unemployment insurance system. We also know that fighting fraud and improving essential programs are not mutually exclusive. We’ve got to do both,” Sen. Wyden said.
The Fraud Prevention and Recovery Act builds on two other pieces of legislation introduced this year to help fight pandemic era fraud.
On the House side today, Rep. Raskin introduced the Government Spending Oversight Act to enact the White House’s call to expand and make permanent the Pandemic Response Accountability Committee’s Pandemic Analytics Center of Excellence – which is set to sunset at the end of fiscal year 2025.
“Congress has a duty to be a responsible steward of the hard-earned taxpayer dollars used to provide support to American families and businesses through federal programs. This new legislation will codify existing anti-fraud data capabilities in the federal government, build oversight tools that help agencies prioritize fraud reduction, and ensure federal programs support those who need and qualify for them,” said Rep. Raskin said today.
Last month, Sens. Peters and Mitt Romney, R-Utah, introduced a Senate version of that bill.
Additionally, in late February, Sens. Wyden and Mike Crapo, R-Idaho, introduced a legislative framework that would extend the statute of limitations for pandemic unemployment insurance (UI) fraud to 10 years. This will provide extended time for prosecutors to investigate and prosecute complex criminal syndicates.
The Government Accountability Office last year estimated that UI fraud during the COVID-19 pandemic reached a range of $100 billion to $135 billion.
