House rushes to extend statute of limitations for pandemic fraud

A top House Republican announced new legislation Tuesday to double the statute of limitations on pandemic unemployment fraud to 10 years and urged fellow lawmakers to move fast, saying they have to act by March 27 or else lose the chance.

Rep. Jason Smith, chair of the Ways and Means Committee, said Congress cannot extend the statute of limitations once that date is crossed.

Estimates put the amount of fraud in the pandemic program anywhere between $100 billion and $400 billion, and just $5 billion has been recovered. That leaves nearly all of the fraud unaccounted for.

“Failure to extend this statute of limitations would mean that the thousands of criminals and international criminal organizations that perpetrated the greatest theft of American taxpayer dollars in history will never be brought to justice,” said Mr. Smith, Missouri Republican.

Uncle Sam spent roughly $800 billion on expanded unemployment benefits during the pandemic. It was one of the major support programs to deal with the shutdowns, along with several business grant and loan programs.

Those business programs were also plagued by fraud, and Congress in 2022 doubled the statute of limitations for prosecutions for those programs from 5 to 10 years.

However, it has failed to act on the unemployment timeline, which currently stands at five years.

Both House and Senate lawmakers have introduced legislation in the past to extend the statute of limitations, and one bill cleared the GOP-led House. But the Senate, under Democratic control at the time, didn’t take action.

The Senate is now under Republican control.

Mr. Smith said the Labor Department, which oversees unemployment fraud, has at least 157,000 open fraud hotline complaints and has more than 1,000 open investigations.

The Justice Department, meanwhile, has more than 1,600 open investigations into pandemic fraud that have not yet been charged.

Pandemic assistance programs proved to be open season for fraudsters, who realized that the government was shoveling cash out the door without many of the usual identity or qualification checks.

Some fraudsters were small-time, filing unemployment claims when they either still held other jobs or hadn’t been employed before the virus struck.

But other fraudsters were big-time, scooping up thousands of stolen identities and filing claims under those names.

The Justice Department has brought charges in about 600 criminal unemployment fraud cases so far, covering about $300 million worth of losses.

That leaves nearly all of the estimated fraud unaccounted for — and the fraudsters in the clear.

“Domestic and transnational criminals likely stole $1 trillion across all assistance programs meant to help needy Americans,” Haywood Talcove, CEO of government at LexisNexis Risk Solutions, told the Ways and Means Committee in a hearing last week. “The money was used to traffic drugs, traffic children and threaten our democracy.”

He said the fraudsters developed a taste for government programs during the pandemic and they haven’t let up since, turning their attention to federal disaster assistance in the wake of last year’s hurricanes along the East Coast and this year’s fires in California.

Now the fraudsters are using artificial intelligence to spoof identity verification systems and bypass safeguards, Mr. Talcove said.

For more information, visit The Washington Times COVID-19 resource page.