Congressional Testimony — The Greatest Theft of American Tax Dollars: Unchecked Unemployment Insurance Fraud (2023-02-08)

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U.S. Department of Labor 
Office of Inspector General 
Congressional Testimony 
Testimony before the  
U.S. House of Representatives Committee on Ways and Means 
Hearing Title: 
“The Greatest Theft of American Tax Dollars: Unchecked Unemployment Fraud” 
Testimony of Larry D. Turner 
Inspector General 
Office of Inspector General 
U.S. Department of Labor  
Number 19-23-003-03-315 
February 8, 2023 

U.S. Department of Labor – Office of Inspector General 
 
Congressional Testimony 
 
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No. 19-23-003-03-315 
Good morning, Chairman Smith, Ranking Member Neal, and distinguished members of 
the Committee. Thank you for the opportunity to testify on the important work of the U.S. 
Department of Labor (DOL or Department) Office of Inspector General (OIG). Although 
the OIG is responsible for overseeing all DOL programs and operations, I will focus my 
testimony today on the OIG’s oversight of the unemployment insurance (UI) program 
during the COVID-19 pandemic. 
 
The OIG has remained committed to meeting the challenges created by the COVID-19 
pandemic and to assisting DOL and Congress in improving the efficiency and integrity 
of the UI program. As my testimony will show, strengthening the UI program to prevent 
fraud before it occurs and to detect it when it does are key objectives to ensure that 
unemployed workers expeditiously receive much needed benefits while safeguarding 
tax dollars directed toward that goal. 
 
Unemployment insurance is generally administered by states with oversight from DOL’s 
Employment and Training Administration (ETA). The OIG is an independent agency 
within DOL that serves the American people, DOL, and Congress by providing objective 
oversight of Departmental programs, including the UI program. The views expressed 
herein are based on the independent findings and recommendations of the OIG’s work 
and are not intended to reflect DOL positions. 
 
 
Overview of the Unemployment Insurance Program 
 
Enacted more than 80 years ago, the UI program is the Department’s largest 
income-maintenance program. A joint federal-state program, unemployment insurance 
is the first economic line of defense against the collective impact of unemployment and 
acts as a safety-net for individuals who lose their jobs through no fault of their own. The 
UI program requires states to make weekly benefit payments in a timely manner, 
providing needed assistance to unemployed workers while ensuring claimants meet 
eligibility requirements. It is equally important that the program has sufficient controls in 
place to quickly determine that benefits are or were paid to the right person in the 
correct amount. Each state workforce agency0F1 (SWA or state): 
 
• administers a separate UI program under its jurisdiction’s laws, but follows 
uniform guidelines established by federal law; 
• establishes requirements for eligibility, benefit amounts, and the length of time 
that benefits can be paid; and 
                                                          
1 This testimony uses “state” or “SWA” to refer to the administrative body that administers the UI program 
within the state, district, or territory. For the 50 states, as well as the U.S. Virgin Islands, Puerto Rico, and 
the District of Columbia, that administrative body is a SWA. There are, therefore, 53 SWAs. The 
Coronavirus Aid, Relief, and Economic Security Act also provided certain UI benefits to American Samoa, 
the Commonwealth of the Northern Mariana Islands, the Federated States of Micronesia, Guam, the 
Marshall Islands, and the Republic of Palau, provided the territory signs an agreement with the 
Department.  

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• manages the personnel and system resources to administer their respective 
programs. 
 
In normal circumstances, UI benefits are generally funded by state employer taxes with 
administrative costs funded by the federal government. Extensions and expansions of 
coverage and benefits, such as those provided by the Coronavirus Aid, Relief, and 
Economic Security (CARES) Act and subsequent legislation, are also normally funded 
by the federal government. 
  
ETA is the federal agency responsible for providing program direction and oversight. 
The OIG conducts independent oversight of the UI program through audits to 
strengthen the integrity and efficiency of the program and through criminal 
investigations to detect and deter large-scale fraud. The OIG’s federal criminal 
investigations are time- and resource-intensive and one of the last lines of defense in 
safeguarding the UI program from fraud. 
 
 
OIG Significant Concerns 
 
The OIG has repeatedly reported significant concerns with DOL and states’ ability to 
deploy program benefits expeditiously and efficiently while ensuring integrity and 
adequate oversight. We have been and remain particularly concerned about 
deployment of UI benefits in response to emergencies including natural disasters and 
economic downturns. The OIG has reiterated these concerns regarding the economic 
downturn created by the pandemic and the hundreds of billions of dollars allocated to 
the UI program.  
 
Less than a month after the CARES Act passed, we published an advisory report1F2 
outlining areas of concern that ETA and the states should consider as they implemented 
the CARES Act UI provisions. Our identification of these areas represents years of work 
relating to DOL’s UI program, including the response to past disasters. One of these 
areas was state preparedness: specifically, the issues of staffing and system 
capabilities.  
 
Deploying Benefits Expeditiously and Efficiently 
 
Rapid deployment of CARES Act funding was critical in helping workers in need. As 
acknowledged by the OIG, staff at ETA and states struggled during the COVID-19 
pandemic as SWAs worked to ensure timely and accurate UI benefits in a time of 
national emergency. Anticipating and addressing the increased risk that came with the 
expanded funding was also vital to meeting the intent of the CARES Act. As the OIG’s 
prior audit work has shown, quickly deploying funds can result in shortcomings in the 
                                                          
2 Advisory Report, CARES ACT: Initial Areas of Concern Regarding Implementation of Unemployment 
Insurance Provisions, Report No. 19-20-001-03-315 (April 21, 2020), available at: 
https://www.oig.dol.gov/public/reports/oa/2020/19-20-001-03-315.pdf 

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effective and efficient implementation of stimulus programs. For example, a 2011 audit 
report2F3 found states took over a year to spend most of the American Reinvestment and 
Recovery Act of 2009 (Recovery Act) funding available for emergency staffing and at 
least 40 percent of funding for this purpose was unspent after 15 months. 
  
In addition, a separate audit on the Recovery Act3F4 found $1.3 billion of the $7 billion that 
DOL provided to states for UI modernization, including information technology (IT) 
modernization, would likely not have been spent before the period of availability expired. 
To access these funds, states had to meet certain modernization criteria; once 
accessed, the funds could be spent for several purposes including to modernize IT 
systems. Of the funds spent from the $7 billion, states did not always take advantage of 
the opportunity to modernize their IT systems.  
 
To implement the new UI programs authorized by the CARES Act, states needed 
sufficient staffing and system resources to manage the extraordinary increases in the 
number of claims and payments. Our pandemic audit work has confirmed that ETA and 
states continued to face challenges in these areas as they endeavored to implement the 
new temporary UI programs, including Pandemic Unemployment Assistance (PUA), 
Pandemic Emergency Unemployment Compensation (PEUC), and Federal Pandemic 
Unemployment Compensation (FPUC) (see Figure 1). 
 
Figure 1: Three Key Pandemic-Related UI Programs 
 
 
Source: CARES Act and related extensions 
 
We also issued audit reports that advised ETA to establish methods to detect and 
recover improper payments, including fraudulent payments, and reported on the 
pandemic program that posed the greatest risk to the UI system: PUA. PUA’s expanded 
coverage, for a population of claimants who were traditionally ineligible to receive UI 
                                                          
3 Recovery Act: DOL Could Have Better Monitored the Use of Re-employment Services Funds to Adhere 
to Standards for Transparency and Accountability, Report No. 18-11-005-03-315 (March 31, 2011), 
available at: https://www.oig.dol.gov/public/reports/oa/2011/18-11-005-03-315.pdf 
4 Recovery Act: More Than $1.3 Billion in Unemployment Insurance Modernization Incentive Payments 
Are Unlikely to Be Claimed by States, Report No. 18-10-012-03-315 (September 30, 2010), available at: 
https://www.oig.dol.gov/public/reports/oa/2010/18-10-012-03-315.pdf 

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benefits,4F5 presented significant challenges to states as they designed and implemented 
processes to determine initial and continued program eligibility. Further, we found the 
risk of improper payments including fraud was even higher under PUA because 
claimants could self-certify their eligibility for benefits. 
  
Our subsequent reports identified continued programmatic weaknesses that led to 
workers unemployed through no fault of their own suffering lengthy delays in receiving 
benefits. For example, the OIG had audited the Disaster Unemployment Assistance 
(DUA) program in 2020 and found the Department had not established adequate 
controls to ensure benefits were paid timely.5F6 States also had difficulty ensuring CARES 
Act programs were implemented promptly. For the PUA, PEUC, and FPUC programs, 
we identified that it took, on average, 38 days for the first payment to be made after the 
CARES Act passed. Also, we identified delays in the first payments for two other 
pandemic UI programs: it took 25 days for the FPUC program and 50 days for the 
PEUC program.6F7  
 
We also found that—from April 1, 2020, to March 31, 2021—only 5 of the 53 SWAs 
(less than 10 percent) were able to timely pay benefits, including the FPUC supplement, 
to regular UI claimants. As a result, during the year following the passage of the CARES 
Act, more than six million Americans waited a month or more for CARES Act 
UI benefits. Furthermore, states are still challenged in paying claimants timely. For the 
month of December 2022, only 22 percent of states were paying regular UI claimants 
timely versus 75 percent before the pandemic started. 
 
History of Improper Payments, including Fraud 
 
For more than 20 years, the OIG has reported on the Department’s 
challenges to measure, report, and reduce improper payments in the 
UI program, which has experienced some of the highest improper 
payment rates across the federal government. The reported improper 
payment rate estimate for the regular UI program has been above 
10 percent for 15 of the last 19 years. In the last 2 years, ETA has 
estimated an improper payment rate of 18.71 percent and 
21.52 percent, respectively.  
 
The UI program requires states to make weekly benefit payments 
while ensuring claimants meet eligibility requirements. A state may 
                                                          
5 The new PUA program extended unemployment benefits to self-employed, independent contractors, 
those with limited work history, and other individuals not traditionally eligible for unemployment benefits 
who were unable to work as a direct result of COVID-19. 
6 ETA Should Do More to Assist Vulnerable States Prepare for Disaster Unemployment Assistance 
Program Implementation, Report No. 04-20-002-03-315 (September 29, 2020), available at: 
https://www.oig.dol.gov/public/reports/oa/2020/04-20-002-03-315.pdf 
7 Also, the 12 states we selected for in-depth analysis were generally unable to demonstrate they met the 
payment promptness standard ETA established for regular UI payments, which is to pay 87 percent of 
claimants within 14 or 21 days. 

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determine a payment is improper after a claimant receives benefits based on new 
information that was unavailable when the SWA approved the benefit payment or as a 
result of the requirement that claimants be provided with due process prior to stopping 
payment of benefits. The leading causes of improper payments have historically been: 
 
• Claimants Do Not Meet Work Search Requirements7F8 – Claimants who fail to 
demonstrate they meet state requirements for work search;  
• Benefit Year Earnings – Claimants who continue to claim benefits after they 
return to work or who misreport earnings during a week in which benefits are 
claimed;  
• Employers Do Not Timely Report Employees’ Separation – Employers or their 
third-party administrators who fail to provide timely and adequate information 
about why individuals separated from their employment; and 
• Fraud – Claims based on fraudulent schemes, such as those perpetrated during 
the pandemic.8F9 
 
 
A Perfect Storm 
 
Following the start of the pandemic in the United States in early 2020, unemployment 
compensation claims rose exponentially to historically unprecedented levels. Prior to the 
pandemic, numbers of UI claims were historically low. On March 14, 2020, the 
Department reported 282,000 initial unemployment claims. Within 2 to 3 weeks, initial 
claims rose to 10 times pre-pandemic levels, far higher than state systems were 
designed to handle.9F10 Within 5 months, through August 15, 2020, the Department 
reported 57.4 million initial claims, the largest increase since the Department began 
tracking UI data in 1967. 
 
The CARES Act provided significant funding to the UI program, which resulted in 
hundreds of billions of dollars in additional payments. New UI programs under the 
CARES Act meant more workers qualified.10F11 Further, unemployed workers received a 
supplement per week in addition to their regular benefit amount and individuals who 
exhausted their regular unemployment benefits were provided additional weeks of 
                                                          
8 The Middle Class Tax Relief and Job Creation Act of 2012 requires that individuals receiving UI benefits 
must be able to work, available to work, and actively seeking work as a condition of eligibility for regular 
compensation for any week. Accordingly, states generally require that unemployed workers demonstrate 
they were actively seeking work. Work search overpayments occur when states pay UI claimants who do 
not demonstrate that they were actively seeking work.  
9 ETA has included fraud as an element of the leading causes rather than as a separate cause. From 
July 2016 to March 2020, the other three causes resulted in over $9 billion in improper payments. Of this 
total, more than $3 billion was attributable to fraud. Since the pandemic started, fraud has significantly 
increased. 
10 COVID-19: States Struggled to Implement CARES Act Unemployment Insurance Programs, 
Report No. 19-21-004-03-315 (May 28, 2021), available at:  
https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf 
11 The PUA program covered workers not typically covered by UI who could self-certify that they were 
able to and available for work but unemployed due to COVID-19-related reasons. 

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unemployment compensation. Also, certain UI claims could be backdated to the 
beginning of the eligibility period. With the legislative extensions, claimants could 
receive up to 79 weeks of pandemic-related UI payments. 
 
In June 2020, the OIG provided a member briefing11F12 and a statement for the record12F13 to 
Congress highlighting challenges DOL and states faced in administering and 
overseeing the UI program as well as the substantially increased fraud risk. The 
expanded coverage offered under the PUA program posed significant challenges to 
states as they implemented processes to determine initial and continued program 
eligibility for participants. The reliance solely on claimant self-certifications without 
evidence of eligibility and wages during the program’s first 9 months rendered the PUA 
program extremely susceptible to improper payments, including fraud. In March 2022, 
the OIG provided oral and written testimony before the U.S. Senate Committee on 
Homeland Security and Governmental Affairs that spoke to the continuation of many of 
these concerns and challenges.13F14  
 
As the OIG reported, the unprecedented infusion of federal funds into the UI program 
gave individuals and organized criminal groups a high-value target to exploit. That, 
combined with easily attainable stolen personally identifiable information and continuing 
UI program weaknesses identified by the OIG over the last several years, allowed 
criminals to defraud the system. Because many states were not prepared to process the 
extraordinary volume of new UI claims and struggled to implement the new UI 
programs, some internal controls that had been traditionally used or recommended for 
the processing of UI claims were not initially put in place.  
 
This created multiple high-reward targets where an individual could make a fraudulent 
claim with relatively low risk of being caught. For example, as time went on, one 
fraudster could have been issued several UI debit cards, with tens of thousands of 
dollars on each card. In fact, in an audit, we found 1 claim that was filed from a 
3-bedroom house shared the same physical address as 90 other claims and used the 
same email address as 145 other claims.14F15 In total, the likely fraudsters received 
$1,569,762 in unemployment benefits. In the same audit, we found that, from 
                                                          
12 “Subcommittee on Government Operations Briefing with the Inspector General for the Department of 
Labor,” Member Briefing, Opening Statement of Scott S. Dahl, Inspector General, U.S. Department of 
Labor; House Committee on Oversight and Reform; Subcommittee on Government Operations 
(June 1, 2020), available at: https://www.oig.dol.gov/public/testimony/20200601.pdf 
13 “Unemployment Insurance During COVID-19: The CARES Act and the Role of Unemployment 
Insurance During the Pandemic,” Hearing, Statement for the Record of Scott S. Dahl, Inspector General, 
U.S. Department of Labor; Senate Committee on Finance (June 9, 2020), available at: 
https://www.oig.dol.gov/public/testimony/20200609.pdf 
14 “Pandemic Response and Accountability: Reducing Fraud and Expanding Access to COVID-19 Relief 
through Effective Oversight,” Hearing, Statement for the Record of Larry D. Turner, Inspector General, 
U.S. Department of Labor; Senate Committee on Homeland Security and Governmental Affairs 
(March 17, 2022), available at: https://www.oig.dol.gov/public/testimony/20220317.pdf  
15 COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds from Improper Payments 
including Fraud or from Payment Delays, Report No. 19-22-006-03-315 (September 30, 2022), 
available at: https://www.oig.dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf 

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March 28, 2020, to September 30, 2020, in 4 states, potentially fraudulent claims were 
paid 60.5 percent of the time.  
 
Estimating the overall improper payment rate for the pandemic UI programs is critical for 
the efficient operation of the program. ETA and the states, under their program 
operating responsibilities, must determine the improper payment rate, including the 
fraud rate, for pandemic UI programs. In August 2020, we recommended that ETA 
estimate the improper payment rate for pandemic UI programs. In December 2021, 
consistent with our recommendation, ETA reported an improper payment rate of 
18.71 percent for 2021, which ETA applied to two of the three key pandemic UI 
programs, PEUC and FPUC. Additionally, in December 2022, ETA reported an 
improper payment rate of 21.52 percent, which it also applied to PEUC and FPUC. 
15F16  
 
We previously reported that, applying the 18.71 percent to an estimated $872.5 billion in 
federal pandemic UI funding, at least $163 billion in pandemic UI benefits could have 
been paid improperly, with a significant portion attributable to fraud. We are now able to 
report updated information, with two primary changes: (1) ETA released its annual 
improper payment rate estimate for fiscal year (FY) 2022 and (2) ETA has recently 
provided a total for pandemic UI spending.16F17 While that expenditure information is likely 
to be updated, we are now able to report on actual expenditures rather than on 
estimated funding.  
 
With those updates, more than $888 billion in total federal and state UI benefits were 
paid for benefit weeks during the UI pandemic period.17F18,
18F19 Applying the estimated 
21.52 percent improper payment rate to the approximate $888 billion in pandemic UI 
expenditures, at least $191 billion in pandemic UI payments could have been improper 
payments, with a significant portion attributable to fraud.  
 
                                                          
16 ETA’s reported improper payment rate estimate of 21.52 percent does not include the PUA program. 
However, it is the most current improper payment rate from ETA. Furthermore, PUA had control 
weaknesses that may have facilitated comparable or greater improper payments. Therefore, applying 
ETA’s rate to all of the approximately $888 billion in UI payments for the pandemic period including PUA 
would equate to at least $191 billion in improper payments. 
17 According to ETA, the data provided reflects CARES Act UI program activity through January 23, 2023, 
with the exception of the Temporary Full Federal Funding of the First Week of Compensable Regular 
Unemployment for States with No Waiting Week program, which is through December 31, 2022; data 
provided regarding the regular UI, Unemployment Compensation for Federal Employees, and 
Unemployment Compensation for Ex-Servicemembers programs reflect the monthly totals from 
April 2020 through September 2021.    
18 With the exception of PUA, for which claims could be backdated to January 27, 2020, we define the UI 
pandemic period as March 27, 2020, through September 6, 2021. We also note that, according to ETA, it 
cannot provide final total costs of the programs because states are still processing claims that were for 
weeks of unemployment prior to expiration of the programs.  
19 The Government Accountability Office published a relevant report in December 2022 that cited 
approximately $878 billion in UI payments for the period reviewed. The expenditure information we have 
provided in this testimony contains more recent updates than were available to the Government 
Accountability Office when it published its report, which is available at: 
https://www.gao.gov/products/gao-23-105523. 

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Based on our audit and investigative work, the improper payment rate for pandemic UI 
programs was likely higher than 21.52 percent. For example, neither of these two rates 
included estimates for the PUA program. ETA stated it would report the estimated 
improper payment rate for PUA in 2022. However, the Office of Management and 
Budget granted the Department an extension to report on PUA in FY 2023. To date, the 
Department has not yet reported the PUA improper payment rate.  
 
As previously mentioned, PUA had control weaknesses that may have facilitated 
comparable or greater improper payments. The reliance solely on claimant 
self-certifications without evidence of eligibility and wages during PUA’s first 9 months 
rendered the program extremely susceptible to improper payments including fraud. 
Notably, in the first 6 months after the CARES Act passed, we found 4 states paid 
$1 out of $5 in PUA benefits to likely fraudsters.19F20 Subsequent to our work identifying 
the fraud risks, Congress took action to require supporting documentation to improve 
states’ abilities to ensure proper claimant eligibility and to mitigate fraud. However, a 
significant amount of UI benefit money had already been paid improperly. 
 
When the OIG identifies anti-fraud measures that may help the program, we share them 
with the Department and SWAs as appropriate. For example, in alert memoranda 
issued in February 2021,20F21 in June 2021,21F22 and in September 2022,22F23 our investigators, 
auditors, and data scientists collaboratively identified $45.6 billion of potentially 
fraudulent UI benefits paid in four high-risk areas, to individuals with Social Security 
numbers: (1) filed in multiple states, (2) of deceased persons, (3) of federal inmates, 
and (4) used to file for UI claims with suspicious email accounts (see Table 1). 
 
                                                          
20 COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds from Improper Payments 
including Fraud or from Payment Delays, Report No. 19-22-006-03-315 (September 30, 2022), 
available at: https://www.oig.dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf 
21 Alert Memorandum: The Employment and Training Administration Needs to Ensure State Workforce 
Agencies Implement Effective Unemployment Insurance Program Fraud Controls for High Risk Areas, 
Report No. 19-21-002-03-315 (February 22, 2021), available at: 
https://www.oig.dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf  
22 Alert Memorandum: The Employment and Training Administration Needs to Issue Guidance to Ensure 
State Workforce Agencies Provide Requested Unemployment Insurance Data to the Office of Inspector 
General, Report No. 19-21-005-03-315 (June 16, 2021), available at: 
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-03-315.pdf 
23 Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas 
Increased to $45.6 Billion, Report No. 19-22-005-03-315 (September 21, 2022), available at: 
https://www.oig.dol.gov/public/reports/oa/2022/19-22-005-03-315.pdf  

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Table 1: Potential Fraud in Four High-Risk Areas through April 2022 
 
High-Risk Area 
Total Potential Fraud  
Reported through April 2022 
Multistate Claimants 
$28,967,047,154 
Deceased Persons 
$139,483,136 
Federal Prisoners23F24 
$267,382,013 
Suspicious Emails 
$16,265,578,304 
Total 
$45,639,490,607 
Source: OIG analysis of data from SWAs, the U.S. Department of Justice’s Bureau of 
Prisons, and the U.S. Social Security Administration 
 
We shared our methodology and underlying data24F25 with ETA for further dissemination to 
the SWAs, and we recommended they establish effective controls to mitigate fraud and 
other improper payments to ineligible claimants. We are currently examining whether 
states took effective measures to address the four high-risk areas. 
 
In its December 2022 report,25F26 the Government Accountability Office (GAO) included 
these findings in support of the determination that substantial levels of fraud and 
potential fraud occurred during the pandemic. GAO noted that the Department has not 
yet developed an antifraud strategy or addressed the most significant fraud risks in the 
program. GAO also reported that all six of its October 2021 recommendations to ETA 
for UI fraud risk assessment remain open. GAO is currently attempting to determine an 
estimate of fraud in the UI program, having reported a potential minimum of $60 billion 
in pandemic-related fraudulent UI payments.  
 
 
OIG Pandemic Investigative Work 
 
The volume of UI investigative matters currently under review is unprecedented in the 
OIG’s history. Prior to the pandemic, the OIG opened approximately 100 UI 
investigative matters annually. Since April 1, 2020, the OIG has opened over 
                                                          
24 The OIG did not have access to federal prisoner data to conduct additional analysis for this 
memorandum. The amount remains the same as what we reported in the June 2021 alert memorandum. 
In the June 2021 alert memorandum, the OIG utilized UI data from March 2020 through October 2020. 
25 Data provided to DOL for further dissemination to the SWAs included data related to more than 
3 million suspicious claimants associated with over $16 billion that the OIG identified in our alert 
memorandum dated June 16, 2021. The over $16 billion did not include about $915 million in potential 
fraud that was identified under more than one area. As soon as is practical, the OIG will share further 
data related to additional suspicious claimants identified in a subsequent alert memorandum with DOL so 
that it can disseminate this information to the SWAs. The methodology has not changed.  
26 GAO, Unemployment Insurance: Data Indicate Substantial Levels of Fraud during the Pandemic; DOL 
Should Implement an Antifraud Strategy, Report No. GAO-23-105523 (December 22, 2022), available at: 
https://www.gao.gov/products/gao-23-105523 

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198,000 investigative matters concerning UI fraud. That is an increase of more than 
1,000 times in the volume of UI work that we are facing. UI investigations now account 
for approximately 96 percent of the OIG investigative case inventory, compared to 
approximately 11 percent prior to the pandemic. 
 
In response to the extraordinary increase in oversight demands, the OIG hired 
additional criminal investigators; increased the caseload of investigators already 
onboard; deployed federal and contract staff to review DOL and states’ efforts; and 
strengthened our data analytics program. In addition, we took several other actions to 
augment our efforts, including the following: 
 
• initiated the development of a National UI Fraud Task Force,26F27 alongside the 
U.S. Department of Justice (DOJ); 
• collaborated with DOJ on the strategic assignment of 12 term-appointed 
assistant United States attorneys assigned solely to prosecute UI fraud; 
• established a multi-disciplinary Pandemic Rapid Response Team within the OIG; 
• appointed a National UI Fraud Coordinator to manage our national investigative 
response to UI fraud; 
• appointed seven Regional UI Fraud Coordinators to partner with SWAs and 
federal, state, and local law enforcement on UI fraud matters in their geographic 
areas of responsibility; 
• leveraged resources from the Council of the Inspectors General on Integrity and 
Efficiency, Pandemic Response Accountability Committee (PRAC); 
• collaborated with state auditors to help develop their audit strategies for the 
CARES Act UI programs;  
• joined the DOJ COVID-19 Fraud Enforcement Task Force;27F28 
• implemented an extensive outreach and education program targeted to SWAs, 
the Department, financial institutions and their associations, law enforcement 
agencies, and the public to inform and raise awareness regarding fraud trends, 
best practices, red flags, and more;28F29 and 
• joined DOJ’s Pandemic Fraud Strike Force Teams initiative.29F30 
 
                                                          
27 More information on the National Unemployment Insurance Fraud Task Force is available at: 
https://www.justice.gov/coronavirus/national-unemployment-insurance-fraud-task-force. 
28 DOJ Office of Public Affairs, “Attorney General Announces Task Force to Combat COVID-19 Fraud,” 
press release (May 17, 2021), available at:  
https://www.justice.gov/opa/pr/attorney-general-announces-task-force-combat-covid-19-fraud 
29 The OIG has issued or assisted in issuing an: UI fraud consumer protection guide; UI fraud 
investigations guide; UI fraud alert for state/local law enforcement; UI text message phishing alert; UI 
fraud and phishing alert; UI fraud and identity theft alert; and UI detection and mitigation alert for financial 
institutions, available at: https://www.oig.dol.gov/OIG_Pandemic_Response_Portal.htm. 
30 The OIG joined the DOJ and other federal law enforcement partners as participants on the DOJ’s new 
COVID-19 Strike Force Teams initiative, announced on September 14, 2022. These Strike Force teams 
will operate out of U.S. Attorney’s Offices in the Southern District of Florida, the District of Maryland, and 
a joint effort between the Central and Eastern Districts of California. They will use dedicated special 
agents from the OIG to focus on significant fraud schemes with an international nexus. DOJ, “Department 
Announces COVID-19 Fraud Strike Force Teams,” press release (September 14, 2022), available at: 
https://www.justice.gov/opa/pr/justice-department-announces-covid-19-fraud-strike-force-teams  

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As the primary federal law enforcement 
agency responsible for providing 
oversight of the UI program, the OIG has 
vigorously pursued COVID-19 
pandemic‑related UI fraud. In fact, we 
announced in September 2022 that 
OIG investigations had resulted in more 
than 1,000 individuals being charged 
with crimes involving UI fraud since 
March 2020.30F31 This number has risen.  
 
As of January 2023, our pandemic 
investigations have resulted in upwards 
of 700 search warrants executed and 
over 1,200 individuals charged with 
crimes related to UI fraud. These 
charges resulted in more than: 
500 convictions; 11,000 months of 
incarceration; and $905 million in 
investigative monetary results. We have 
also referred over 23,000 fraud matters 
that do not meet federal prosecution 
guidelines back to the states for further 
action. 
 
In one recent OIG investigation, 11 members and associates of the Brooklyn-based 
Woo Gang were charged with a multi-million-dollar pandemic UI fraud scheme.31F32 In 
another recent OIG investigation, a former California Employment Development 
Department employee was sentenced to more than 5 years in prison for fraudulently 
obtaining nearly $4.3 million in pandemic relief UI funds.32F33 
 
                                                          
31 “Labor Watchdog’s Pandemic Work Results in More Than 1,000 Individuals Charged with UI Fraud and 
$45.6 Billion Identified in Potentially Fraudulent Pandemic UI Benefits,” press release 
(September 22, 2022), available at: https://www.oig.dol.gov/public/Press%20Releases/DOL-
OIG%20Pandemic%20Work%20Results%20in%20More%20Than%201000%20Individuals%20Charged
%20with%20UI%20Fraud.pdf. For more details about OIG investigations, please visit: 
https://www.oig.dol.gov/OIG_Pandemic_Response_Portal.htm. 
32 DOJ, U.S. Attorney’s Office, Eastern District of New York, “11 Members and Associates of the 
Brooklyn-Based Woo Gang Charged with Multi-Million Dollar COVID Unemployment Insurance Fraud,” 
press release, (February 17, 2022), available at: 
https://www.oig.dol.gov/public/Press%20Releases/11_Members_and_Associates_of_the_Brooklyn-
Based_Woo_Gang_Charged_with_Multi-Million_Dollar_COVID.pdf 
33 DOJ, U. S. Attorney’s Office, Central District of California, “One-Time EDD Employee Sentenced to 
More Than 5 Years in Prison for Fraudulently Obtaining Nearly $4.3 Million in COVID Relief Funds,” press 
release (February 4, 2022), available at: https://www.oig.dol.gov/public/Press%20Releases/One-
Time_EDD_Employee_Sentenced_to_More_Than_5_Years_in_Prison_for_Fraudulently_Obtaining_Near
ly.pdf 
During the execution of a UI fraud search warrant, 
OIG agents recovered multiple firearms, UI debit 
cards, and notebooks containing personally 
identifiable information. 

U.S. Department of Labor – Office of Inspector General 
 
Congressional Testimony 
 
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In another OIG investigation, a Nigerian state official was sentenced to 5 years in prison 
for stealing U.S. disaster aid, including approximately $500,000 in pandemic-related 
unemployment benefits. The official stole the personal identifying information of more 
than 20,000 Americans to submit more than $2 million in claims for federally funded 
disaster relief benefits and fraudulent tax returns.33F34 
 
Working with Domestic and International Law Enforcement Partners 
 
Early in the pandemic, the OIG worked with the DOJ to create the National UI Fraud 
Task Force, a nine-agency federal task force focused on law enforcement intelligence 
sharing, deconfliction, joint national and regional messaging, and the effective use of 
investigative and prosecutorial resources. The National UI Fraud Task Force has also 
worked closely with partners at the International Organized Crime Intelligence and 
Operations Center (IOC-2) to develop a deconfliction process to coordinate investigative 
information across federal law enforcement agencies. Through data analytics and a 
leads generation process, the National UI Fraud Task Force and IOC-2 partner 
agencies have identified significant fraud committed against the UI program by domestic 
and international criminal organizations. Many of these include street-level criminal 
organizations with ties to illegal guns and drugs. These investigations are ongoing and 
actively being investigated through the National UI Fraud Task Force, the COVID-19 
Fraud Enforcement Task Force, and the COVID-19 Strike Force initiative. 
  
The OIG has been very engaged on DOJ’s COVID-19 Fraud Enforcement Task Force. 
We have representation on its subcommittees involving communications, forfeiture, 
corporations and large business fraud, and data, and we co-chair the task force’s 
criminal enterprise subcommittee. Recently, the OIG also joined the DOJ Strike Force 
initiative. 
  
The OIG has also participated in other initiatives. For example, in 2020 and 2021, the 
OIG supported DOJ’s annual Money Mule Initiative,34F35 which aimed to raise awareness 
about and suppress money mule activity. Money mules are people who, at someone 
else’s direction, receive and move money obtained from victims of fraud. The OIG 
conducted extensive internal and external outreach regarding money mules and 
identified and targeted money mules in coordination with DOJ and other partner 
agencies. 
 
In addition, the OIG issued alerts to financial institutions about UI fraud both on its own 
and jointly with its partners, such as the U.S. Secret Service (Secret Service), Financial 
Crimes Enforcement Network (FinCEN), and the National UI Fraud Task Force. One 
                                                          
34 DOJ, U.S. Attorney’s Office, Western District of Washington, “Nigerian state official sentenced to 
5 years in prison for stealing U.S. disaster aid and taxpayer refunds,” press release 
(September 26, 2022), available at: 
https://www.oig.dol.gov/public/Press%20Releases/Nigerian_state_official_sentenced_5_years_stealing_d
isaster_aid_USAO%20WD-WA_09262022.pdf  
35 More information about DOJ’s Money Mule Initiative is available at: 
https://www.justice.gov/civil/consumer-protection-branch/money-mule-initiative.  

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such joint OIG/Secret Service alert35F36 served as a framework for the recovery of millions 
of dollars of fraudulent UI funds being held by financial institutions. Later, in 2021, the 
OIG authored a National UI Fraud Task Force alert issued through FinCEN to financial 
institutions requesting they identify funds they froze due to suspicion of fraud. The OIG 
created a process with DOJ and the Secret Service to collect that data and work with 
those financial institutions to return fraudulent funds to SWAs. The OIG and its law 
enforcement partners are working with hundreds of financial institutions in response to 
our request. 
 
The PRAC has also played a pivotal role in amplifying the ability of OIGs to share 
information and conduct internal and external outreach to stakeholders that have been 
impacted by pandemic fraud. For example, the OIG worked with the PRAC on social 
media tool kits related to money mule activity and erroneous 1099-G forms that were 
issued to victims of UI fraud. The OIG has also worked with the PRAC, DOJ, and the 
Secret Service to create a web-based survey where financial institutions can more 
broadly report UI and other types of pandemic fraud. This information is being collected 
by the PRAC, analyzed by its partners, and, if appropriate, sent to field personnel for 
further action.  
 
The OIG, through its membership in IOC-2, has also been engaged with several allied 
national police agencies to strategize about pandemic-related fraud and how to best 
establish practices to share information. The issue of pandemic fraud has not only been 
an issue for the United States, but it has also negatively impacted our foreign partners’ 
pandemic programs. We have conducted outreach and education related to pandemic 
fraud, including UI fraud, with our Five Eyes36F37 partner countries as participants on the 
International Public Sector Fraud Forum. 
 
The OIG, IOC-2, and our federal law enforcement partners have identified numerous 
instances of international organized criminal groups engaged in UI fraud. We will 
continue to work with our domestic and international law enforcement partners on these 
matters. 
 
 
                                                          
36 Secret Service and OIG, “Detection and Mitigation of Unemployment Insurance Fraud Guidance for 
Financial Institutions,” July 6, 2020, available at:  
https://www.neach.org/Portals/0/USSS-DOL%20OIG%20UI%20Advisory%207_6_2020.pdf 
37 Five Eyes is an intelligence alliance. The Five Eyes countries include Australia, Canada, New Zealand, 
the United Kingdom and the United States. The International Public Sector Fraud Forum consists of 
representatives from organizations from the Five Eyes countries, whose collective aim is to share best 
and leading practices in fraud management and control across public borders. International Public Sector 
Fraud Forum guidance is available at:  
https://www.gov.uk/government/publications/international-public-sector-fraud-forum-guidance.  

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OIG Pandemic Oversight Work 
 
In April 2020, shortly after CARES Act enactment, we published our Pandemic 
Response Oversight Plan37F38 detailing how the OIG would conduct its pandemic 
oversight, with a significant focus on the UI program. We designed our four-phased plan 
to provide recommendations to DOL to address current and emerging vulnerabilities 
with the pandemic response and to prevent similar vulnerabilities from hampering 
preparedness for future emergencies (see Figure 2).  
 
Figure 2: The OIG’s Four-Phased Design for Pandemic Oversight 
 
 
Source: OIG Pandemic Response Oversight Plan 
 
Phases 1 and 2, which are complete, focused on DOL’s plans, guidance, and initial 
implementation of administration and oversight activities. Phase 3 audit work, assessing 
program results and emerging issues, is ongoing. Our Phase 4 work plans include 
summarizing our pandemic response oversight work and reporting on lessons learned 
related to UI, worker safety and health, and employment and training. We have 
published two plan updates, most recently on March 21, 2022, with another planned for 
FY 2023.  
 
At the start of the pandemic, we examined past audits including those related to the 
Recovery Act and the DUA program,38F39 and we assessed comparable lessons learned. 
                                                          
38 Pandemic Response Oversight Plan (updated March 21, 2022), available at: 
https://www.oig.dol.gov/public/oaprojects/Updated%20Pandemic%20Response%20Oversight%20Plan%
202022%20for%20Publication.pdf 
39 Examples include: Recovery Act: DOL Could Have Better Monitored the Use of Re-employment 
Services Funds to Adhere to Standards for Transparency and Accountability,  
Report No. 18-11-005-03-315 (March 31, 2011), available at: 
https://www.oig.dol.gov/public/reports/oa/2011/18-11-005-03-315.pdf; Recovery Act: States Challenged in 
Detecting and Reducing Unemployment Insurance Improper Payments, Report No. 18-16-005-03-315 
(August 2, 2016), available at: https://www.oig.dol.gov/public/reports/oa/2016/18-16-005-03-315.pdf; and 
Audit of Florida Disaster Unemployment Assistance Grant Number 1359 - DR (March 26, 2004), 
Report No. 04-04-004-03-315 (March 26, 2004), available at:   
https://www.oig.dol.gov/public/reports/oa/2004/04-04-004-03-315.pdf. 

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As a result, in April 2020, we issued the previously noted advisory report39F40 identifying 
six initial areas of concern for ETA and the states to consider while implementing 
CARES Act UI provisions: (1) state preparedness (specifically the issues of staffing and 
system capabilities), (2) initial eligibility determination, (3) benefit amount, (4) return to 
work, (5) improper payment detection and recovery, and (6) program monitoring. Our 
identification of these areas represents at least 16 years of work relating to DOL’s UI 
program, including the response to past disasters. The advisory report summarized 
dozens of OIG recommendations to implement corrective action in these areas. 
 
We have issued several subsequent reports, including alert memoranda addressing 
urgent concerns, involving the UI program, such as the following: 
 
• In May 2020, we issued an alert memorandum40F41 describing our concerns 
regarding claimant self-certification in the PUA program. In our view, reliance on 
such self-certifications rendered the PUA program highly vulnerable to improper 
payments including fraud. Subsequent to our work, Congress took action to 
require supporting documentation to improve states’ abilities to ensure proper 
claimant eligibility and to mitigate fraud through the Consolidated Appropriations 
Act, 2021. 
 
• In August 2020, we reported41F42 states did not use existing tools effectively to 
combat fraud and other improper payments. We also stated ETA should work 
with the OIG to obtain access to state claimant data that could be used to identify 
and disrupt fraudulent schemes that threaten the integrity of UI programs, 
including those under the CARES Act. 
 
• In May 2021, we reported42F43 that DOL and states struggled to implement the 
three pandemic UI programs that posed the greatest risk for fraud, waste, and 
abuse: PUA, PEUC, and FPUC. Specifically, DOL’s guidance and oversight did 
not ensure states: implemented the programs and paid benefits promptly, 
performed required and recommended improper payment detection and recovery 
activities, or reported accurate and complete program activities. This occurred 
primarily because states’ IT systems were not modernized, staffing resources 
                                                          
40 Advisory Report: CARES Act: Initial Areas of Concern Regarding Implementation of Unemployment 
Insurance Provisions, Report No. 19-20-001-03-315 (April 21, 2020), available at: 
https://www.oig.dol.gov/public/reports/oa/2020/19-20-001-03-315.pdf 
41 Alert Memorandum: The Pandemic Unemployment Assistance Program Needs Proactive Measures to 
Detect and Prevent Improper Payments and Fraud, Report No. 19-20-002-03-315 (May 26, 2020), 
available at: https://www.oig.dol.gov/public/reports/oa/2020/19-20-002-03-315.pdf 
42 COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation Under The CARES 
Act Report No. 19-20-008-03-315 (August 7, 2020), available at: 
https://www.oig.dol.gov/public/reports/oa/2020/19-20-008-03-315.pdf 
43 COVID-19: States Struggled to Implement CARES Act Unemployment Insurance Programs, Report No. 
19-21-004-03-315 (May 28, 2021), available at:  
https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf 

U.S. Department of Labor – Office of Inspector General 
 
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No. 19-23-003-03-315 
were insufficient to manage the increased number of new claims, and, according 
to state officials, ETA’s guidance was untimely and unclear. 
 
• In November 2021, we issued43F44 the Department a qualified opinion, for the first 
time in 25 years, on its consolidated financial statements and reported one 
material weakness related to pandemic-related UI funding. There were two 
primary causes for this issue: (1) the Department being unable to support 
$47.3 billion it estimated for UI claims in appeal or unprocessed as of 
September 30, 2021, and (2) unreliable reporting of $4.4 billion in UI benefit 
overpayments due to certain states’ non-reporting of UI overpayment activity. 
 
• In July 2022, we reported44F45 that the Department did not meet the requirements 
for compliance with the Payment Integrity Information Act (PIIA) for FY 2021. 
PIIA requires federal agencies to identify programs susceptible to significant 
improper payments, estimate the improper payments for those programs, and 
report on actions to reduce the improper payments in those programs. While 
DOL met three of the six compliance requirements for UI programs, we found 
DOL did not meet the other three requirements: it did not publish all improper 
payment estimates, did not demonstrate improvement from the improper target 
rate published in FY 2020, and did not report an improper payment rate of less 
than 10 percent. 
 
• In August 2022, we issued an alert memorandum45F46 describing our concerns 
regarding states either not submitting required CARES Act UI program reports to 
ETA or reporting zero activity. We found the reporting to be deficient for the eight 
reports we examined. For the PUA program, which was highly susceptible to 
improper payments including fraud, seven states reported zero overpayments for 
all months during the entire program period of March 2020 through 
September 2021. Without accurate state performance information, Congress and 
ETA are not able to: fully assess state activities, mitigate the risk of 
overpayments including fraud, identify program weaknesses, or establish lessons 
learned that may be leveraged to improve states’ performance under similar, 
future temporary programs. 
 
                                                          
44 FY 2021 Independent Auditor's Report on the DOL Financial Statements, Report No. 22-22-003-13-001 
(November 19, 2021), available at: https://www.oig.dol.gov/public/reports/oa/2022/22-22-003-13-001.pdf  
45 The U.S. Department of Labor Did Not Meet the Requirements for Compliance with the Payment 
Integrity Information Act for FY 2021, Report No. 22-22-007-13-001 (July 1, 2022), available at: 
https://www.oig.dol.gov/public/reports/oa/2022/22-22-007-13-001.pdf  
46 Alert Memorandum: Employment and Training Administration Needs to Ensure State Workforce 
Agencies Report Activities Related to CARES Act Unemployment Insurance Programs,  
Report No. 19-22-004-03-315 (August 2, 2022), available at:  
https://www.oig.dol.gov/public/reports/oa/2022/19-22-004-03-315.pdf  

U.S. Department of Labor – Office of Inspector General 
 
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• As of September 2022, we have issued three alert memoranda46F47 that identified a 
total of $45.6 billion in potentially fraudulent UI benefits paid from 
March 2020 through April 2022 in the four specific high-risk areas previously 
mentioned, to individuals with Social Security numbers: (1) filed in multiple 
states, (2) of deceased persons, (3) of federal prisoners, and (4) used to file UI 
claims with suspicious email accounts. We previously recommended in our 
June 2021 alert memorandum that ETA amend 20 Code of Federal Regulations 
Part 603 and update its guidance to provide the OIG with access to SWA UI data 
for all IG engagements authorized under the Inspector General Act of 1978, as 
amended (IG Act). In September 2022, we recommended ETA implement 
immediate measures to ensure ongoing OIG access to UI claims data for audit 
and investigative purposes and expedite regulatory updates to require ongoing 
disclosures of UI information to the OIG for audits and investigations of federal 
programs.  
 
• In September 2022, we reported47F48 ETA and states did not protect 
pandemic-related UI funds from historic levels of improper payments including 
fraud nor from payment delays. We attributed this to four causes: lack of eligibility 
testing, untimely oversight, PUA self-certification, and the 3-month suspension of 
a primary oversight tool. Additionally, DOL’s interpretation of its regulations on 
data access hindered the OIG’s timely and complete access to UI claims data to 
assist in detecting and deterring fraud. We estimated that, in the initial 6 months 
after the CARES Act passed, 4 states paid $30.4 billion in PUA and FPUC 
benefits improperly (42.4 percent) including $9.9 billion paid to likely fraudsters 
(13.8 percent). Further, based on our analysis of ETA’s timeliness reports, at 
least 6.2 million American workers nationwide waited a month or more for 
pandemic-related UI benefits during the year after the CARES Act passed. 
 
• In December 2022, for the second straight year, we issued48F49 the Department a 
qualified opinion on its consolidated financial statements and reported one 
material weakness related to pandemic-related UI funding. There were two 
primary causes for this issue: (1) the Department was unable to support 
                                                          
47 (1) Alert Memorandum: The Employment and Training Administration (ETA) Needs to Ensure State 
Workforce Agencies (SWA) Implement Effective Unemployment Insurance Program Fraud Controls for 
High Risk Areas, Report No. 19-21-002-03-315 (February 22, 2021), available at: 
https://www.oig.dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf;  
(2) Alert Memorandum: The Employment and Training Administration Needs to Issue Guidance to Ensure 
State Workforce Agencies Provide Requested Unemployment Insurance Data to the Office of Inspector 
General, Report No. 19-21-005-03-315 (June 16, 2021), available at: 
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-03-315.pdf; and  
(3) Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas 
Increased to $45.6 Billion, Report No. 19-22-005-03-315 (September 21, 2022), available at: 
https://www.oig.dol.gov/public/reports/oa/2022/19-22-005-03-315.pdf  
48 COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds from Improper Payments 
including Fraud or from Payment Delays, Report No. 19-22-006-03-315 (September 30, 2022), available 
at: https://www.oig.dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf  
49 FY 2022 Independent Auditor's Report on the DOL Financial Statements, Report No. 22-23-002-13-001 
(December 13, 2022), available at: https://www.oig.dol.gov/public/reports/oa/2023/22-23-002-13-001.pdf  

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$7.9 billion it estimated in remaining pandemic-related UI claims in appeal or 
unprocessed as of September 30, 2022, and (2) the Department was unable to 
support the $3.5 billion it estimated in remaining pandemic-related UI benefit 
overpayment receivables. 
 
 
OIG Recommendations 
 
The OIG has made several recommendations to DOL and Congress to improve the 
efficiency and integrity of the UI program. While action has been taken to resolve some 
recommendations, further action is needed to close them. Summaries of key 
recommendations that remain open follow.  
 
OIG Recommendations to DOL 
 
OIG Access to Claims and Wage Data 
• Implement immediate measures to ensure ongoing OIG access to UI claims data 
for all audit and investigative purposes  
• Expedite regulatory updates to require ongoing disclosures of UI information to 
the OIG for audits and investigations of federal programs 
 
Staffing and Systems for Prompt Payments during Emergencies 
• Continue to work with states to develop, operate, and maintain a modular set of 
technological capabilities (i.e., staffing and replacing legacy IT systems) to 
modernize the delivery of UI benefits that is sufficient to manage and process 
sudden spikes in claims volume during emergencies or high unemployment 
• Create a rapid response team consisting of federal and state officials capable of 
providing technical and other assistance to SWAs impacted by major disasters 
• Conduct a study to assess: the technological needs of the UI programs to 
determine the capabilities that need to be upgraded or replaced, the features 
necessary to effectively respond to rapid changes in the volume of claims in 
times of emergency or high unemployment, the capabilities needed to ensure 
effective and equitable delivery of benefits, and the capabilities to minimize 
fraudulent activities 
• Develop standards for providing clear and reasonable timeframes to implement 
temporary programs to establish expectations for prompt benefit payments to 
claimants 
 
Controls for Improper Payments 
• Establish effective controls, in collaboration with SWAs, to mitigate fraud and 
other improper payments to potentially ineligible claimants, including multistate 
claimants, claimants who used Social Security numbers of deceased persons 
and federal prisoners, and claimants with suspicious email accounts 

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• Include CARES Act UI transactions in the Benefit Accuracy Measurement 
(BAM)49F50 system or develop an alternative methodology to reliably estimate 
improper payments for those programs 
• For DOL financial statements, design and implement controls to ensure 
management’s reviews of [UI program] estimates are performed at a sufficient 
level of detail and adequate documentation is maintained to assess the 
reasonableness of the estimates  
 
Guidance and Assistance to States 
• Assist states with claims, overpayment, and fraud reporting to create clear and 
accurate information, and then use the overpayment and fraud reporting to 
prioritize and assist states with fraud detection and recovery 
• Examine the effectiveness of the BAM system contact verification process to 
ensure it reflects the current methods claimants use to seek work  
 
Coordination with Congress 
• Work with Congress to establish legislation requiring SWAs to cross-match in 
high-risk areas, including to individuals with Social Security numbers: filed in 
multiple states, of deceased persons, of federal prisoners, and with suspicious 
email accounts 
 
OIG Recommendations to Congress 
 
In addition, Congress should consider legislative proposals included in prior DOL 
budget requests and pass legislation to improve UI program integrity. The DOL 
proposals include the following: 
 
• require SWAs to cross-match UI claims against the National Directory of New 
Hires; 
• require SWAs to cross-match UI claims with the U.S. Social Security 
Administration’s prisoner database and other repositories of prisoner information; 
• allow SWAs to retain 5 percent of UI overpayment recoveries for program 
integrity purposes; and 
• require SWAs to use UI penalty and interest collections solely for UI 
administration. 
 
These legislative proposals are consistent with previous OIG findings and 
recommendations to improve the UI program.  
 
The OIG has also recommended that Congress ensure DOL and the OIG have ongoing, 
timely, and complete access to UI claimant data and wage records for our respective 
                                                          
50 BAM is a quality control statistical survey used to identify errors and support corrective action in the 
state UI system. It usually focuses on the three major UI programs: regular UI, Unemployment 
Compensation for Federal Employees, and Unemployment Compensation for Ex-service members. The 
BAM data are an estimate of the total improper payments in the UI program, in each state and the nation 
as a whole, based on a statistically valid examination of a sample of paid and denied claims.  

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Congressional Testimony 
 
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oversight responsibilities. In addition, in our November 2022 Semiannual Report to 
Congress, the OIG recommended that Congress extend the statute of limitations for 
fraud involving pandemic‑related UI programs, and authorize OIG participation in asset 
forfeiture funds to combat UI fraud and other crimes. 
 
 
DOL’s Progress 
 
The Department has emphasized the progress it has made in addressing challenges 
with the UI program. According to DOL, it has instituted efforts to focus on program 
integrity when implementing the pandemic-related UI programs. These efforts include 
establishing agreements with states to comply with all applicable requirements to 
receive funds, issuing operating guidance, and providing technical assistance to SWAs 
individually and through webinars. DOL has included requirements for SWAs to focus 
on program integrity in its guidance relevant to UI funds. In addition, DOL has reinforced 
the need for SWAs to actively work with the OIG to address fraud in the UI program. As 
previously mentioned, GAO recently reported that DOL has yet to develop an antifraud 
strategy to ensure it addresses the most significant fraud risks facing the UI system.50F51 
 
The Department has facilitated the OIG’s access to UI data but only for benefit weeks 
covered by CARES Act programs and related extensions. In addition, ETA has required 
grant recipients to share state UI data with the OIG as a condition of the fraud 
prevention grants offered under the American Rescue Plan Act of 2021 (ARPA), which 
will provide such access through December 31, 2023. However, three states did not 
receive the grants; therefore, the data provided to the OIG will be incomplete. The OIG 
needs access to all UI program data to effectively do its job. 
 
On August 31, 2021, the Department announced the establishment of the Office of 
Unemployment Insurance Modernization to work with state and federal partners to 
modernize and reform the UI system.51F52 According to DOL, the Office of Unemployment 
Insurance Modernization will provide oversight and management of the $2 billion 
allotted to UI initiatives by ARPA to prevent and detect fraud, promote equitable access, 
ensure timely benefit payments, and reduce backlogs.  
 
The Department also noted it has announced grant opportunities to states, including 
funds for pilot states to engage community-based organizations to help workers learn 
about UI benefits and related services and to support state agencies in delivering timely 
benefits to workers. DOL stated it has also made progress on implementing further 
grant opportunities, such as for: fraud prevention, promoting equitable access to UI 
programs, the Tiger Teams initiative to consult with states in improving UI systems and 
                                                          
51 GAO, Unemployment Insurance: Data Indicate Substantial Levels of Fraud during the Pandemic; DOL 
Should Implement an Antifraud Strategy, Report No. GAO-23-105523 (December 22, 2022), available at: 
https://www.gao.gov/products/gao-23-105523  
52 For information about the strategic vision outlined in August 2021 UI modernization plans, a fact sheet 
is available at: https://oui.doleta.gov/unemploy/pdf/FactSheet_UImodernization.pdf. 

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processes, and the opportunity to participate in its UI IT Modernization Project-Claimant 
Experience Pilot.52F53  
 
 
OIG Challenges Overseeing the UI Program 
 
The OIG’s three biggest challenges overseeing the UI program are in the areas of data 
access, resource limitations, and the statute of limitations related to UI fraud.  
 
Data Access 
 
The OIG’s lack of ongoing, timely, and complete access to UI claimant data and wage 
records from SWAs remains a significant challenge. This deficiency directly and 
adversely impedes the OIG’s ability to provide independent oversight and combat fraud, 
waste, and abuse to help DOL reduce improper payments in its programs, including 
regular and temporary UI programs.  
 
The power and use of data and predictive analytics enables the OIG to continuously 
monitor DOL programs and operations to detect and investigate fraud. Continuous 
monitoring serves as a deterrent to fraud, allows the OIG to promptly discover areas of 
weakness, and assists DOL management to timely correct problems. However, the 
OIG’s ability to proactively detect UI fraud through our audit and investigative activities 
continues to be impacted by these data concerns.  
 
Prior to August 2021, DOL required SWAs to disclose UI data only for specific fraud 
investigations. DOL asserted it lacked the authority to require SWAs to provide UI data 
to the OIG for audits. As a result, the OIG was forced to take the unprecedented step of 
using Inspector General subpoenas to obtain this critical data. DOL’s interpretation of its 
regulations hindered the OIG’s ongoing, timely, and complete access to state UI claims 
data to assist in detecting and deterring large-scale fraud.  
 
Specifically, DOL continues to interpret regulations53F54 as prohibiting ETA from requiring 
SWAs to provide UI data to the OIG for all audit and investigative purposes, except 
those involving specific instances of suspected fraud. This interpretation and 
subsequent guidance to SWAs contradict the IG Act, which authorizes mandatory OIG 
access to DOL grantee information, including SWAs’ UI data.  
 
                                                          
53 For more details, Training and Employment Notice No. 16-21 is available at: 
https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEN/2021/TEN_16-21.pdf. 
54 20 Code of Federal Regulations Part 603 

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In our June 2021 alert memorandum,54F55 we recommended that ETA amend its 
regulations55F56 through the rulemaking process to reinforce that SWAs’ UI information 
must be provided to the OIG for all IG engagements authorized under the IG Act, 
including audits, evaluations, and investigations. To date, ETA has implemented only a 
temporary solution. On August 3, 2021, ETA issued guidance56F57 requiring SWAs to 
disclose UI data to the OIG for audits and investigations during the period 
January 27, 2020, to September 6, 2021. ETA also awarded fraud prevention grants to 
states conditioned on requiring OIG access to their UI data for investigative and audit 
purposes through December 31, 2023.  
 
However, ETA’s actions are not sufficient to resolve the OIG’s recommendations or 
concerns. In response to our recommendations, ETA has taken limited actions to 
support the OIG having access to UI data. For example, it published guidance that 
reminded states of the OIG’s authority under the IG Act and strongly encouraged states 
to comply with OIG requests. ETA also informed us it is considering comprehensive 
updates to the relevant regulations. We met with ETA numerous times and requested a 
written plan with projected timelines. ETA provided a plan to the OIG in July 2022. The 
projected timeline creates a 14-month gap between when the grants requiring OIG 
access end on December 31, 2023, and the publication of updated regulations 
anticipated to be effective in February 2025. Unless the Department implements an 
interim solution ensuring the OIG’s complete and timely access to UI program data and 
information by the end of 2023, the Department’s regulations will renew impediments to 
the OIG’s access experienced prior to and during the pandemic and may necessitate 
additional subpoenas.  
 
While the OIG and ETA agree that changing regulations requires notice and comment 
rulemaking, an immediate and legally sound interim solution is available to ETA. In the 
alert memorandum issued September 21, 2022, the OIG highlighted the Department’s 
authority to amend its interpretation of its regulations without changing the regulations 
themselves. ETA could immediately amend its interpretation of its regulations to be 
consistent with the IG Act. Specifically, ETA can issue guidance to inform SWAs that 
they must timely provide UI data to the OIG for audits and investigations consistent with 
the IG Act. The historic levels of improper payments that the OIG has identified, 
including potential fraud, supports the conclusion that the OIG’s continued access to 
state UI data is imperative. 
 
To aid in resolving this issue, we previously requested that Congress consider 
legislative action to authorize DOL and the OIG to have unfettered access to UI 
claimant data and wage records for our oversight responsibilities. Unfettered access to 
states’ UI claimant data and wage records systems would further enable the OIG to 
                                                          
55 Alert Memorandum: The Employment and Training Administration Needs to Issue Guidance to Ensure 
State Workforce Agencies Provide Requested Unemployment Insurance Data to the Office of the 
Inspector General, Report No. 19-21-005-03-315 (June 16, 2021), available at: 
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-03-315.pdf 
56 20 Code of Federal Regulations Part 603.5 and Part 603.6(a) 
57 Unemployment Insurance Program Letter (UIPL) No. 04-17, Change 1 

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quickly identify large-scale fraud and expand its current efforts to share emerging fraud 
trends with ETA and SWAs to strengthen the UI program and deter fraud before it 
occurs. In addition, conducting data analytics from such access would further enable 
our auditors to identify program weaknesses and recommend corrective actions that 
would improve the timeliness of UI benefit payments and the integrity of the UI program. 
To underscore this point, based on the data obtained by the OIG, our auditors, 
investigators, and data scientists in our Office of Audit and Office of Investigations 
worked collaboratively to identify $45.6 billion of dollars in potential UI fraud57F58 paid in 
the four specific high-risk areas, such as to multistate claimants and deceased persons. 
 
Resource Limitations 
 
The OIG greatly appreciates that Congress appropriated a total of $38.5 million in 
supplemental funding during the pandemic to fund the OIG’s oversight of expanded 
DOL programs and operations. However, most of this funding will be fully expended by 
the first or second quarter of FY 2024. In addition, the OIG’s FY 2021 and 
FY 2022 appropriations remained flat and the FY 2023 appropriation was $11 million 
less than requested. As a result, the OIG is currently in the process of reducing its 
workforce through attrition. This includes reducing our investigative capacity by 
approximately 20 percent by the end of FY 2023. Similarly, from an oversight 
perspective, the OIG has had to cancel 10 audits related to pandemic oversight that 
were planned for FY 2023. These reductions in the OIG’s investigative and audit 
capacity are of great concern given the issues discussed in this testimony. 
 
Today, the OIG has 111 field agents to investigate approximately 2,000 investigative 
matters currently assigned to our field offices, an average of 18 investigative matters 
per agent. The ideal caseload per agent is between 5 and 10 open investigative 
matters, which ensures that the matter can proceed efficiently through the investigative 
and prosecutorial processes. It is important to note that the OIG is still reviewing 
approximately 162,000 open UI fraud complaints received throughout the pandemic and 
continues to receive between 100 to 300 new UI fraud complaints each week.  
 
In addition, based on past oversight experience of federal UI disaster aid, the OIG 
expects to be actively investigating UI fraud relating to the pandemic for several years. 
The OIG will likely be conducting these investigations through at least 
September 2026 when the statute of limitations for most pandemic-related violations will 
have expired. In many cases, the statute of limitations will expire sooner than that. We 
simply do not have the resources to review the 162,000 open UI fraud complaints and to 
conduct investigations of each instance of suspected fraud before the statute of 
limitations expires.  
 
Similarly, the OIG has less than 100 auditors to oversee DOL programs that cost 
taxpayers billions of dollars each year. The OIG intended to use its remaining ARPA 
                                                          
58 Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas 
Increased to $45.6 Billion, Report No. 19-22-005-03-315 (September 21, 2022), available at: 
https://www.oig.dol.gov/public/reports/oa/2022/19-22-005-03-315.pdf  

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funds to conduct additional oversight work using contractors and to support that work 
using contract data analysts and scientists. However, the OIG is now forced to use the 
remaining ARPA funds to fund salaries and benefits of employees brought on board 
during the pandemic to assist with the oversight of pandemic-related programs and 
operations. This will result in fewer audits and recommendations for improvement of 
pandemic-related programs and operations. 
 
Finally, although the OIG has focused the majority of its audit and investigative 
resources on UI benefit programs, the OIG has extensive responsibilities covering other 
high-risk DOL programs that continue to warrant significant oversight, including: 
 
• other worker benefit programs, such as workers’ compensation;  
• worker safety and health, including occupational and miner safety and health and 
workplace rights; 
• employment and training programs, including grants and the Job Corps program;  
• statistics, legal and international programs, and contracting;  
• information technology and data analytics; 
• financial management and single audits; and  
• other DOL operations and programs. 
 
Areas of significant concern include managing medical benefits such as opioids, 
maintaining the integrity of Foreign Labor Certification programs, protecting the security 
of employee benefit plan assets, ensuring the solvency of the Black Lung Disability 
Trust Fund, and improving the Job Corps’ procurement process. It is a crucial time for 
the OIG to help DOL ensure programmatic strength to review the effectiveness, 
efficiency, economy, and integrity of DOL programs and operations.  
 
Over the past 10 fiscal years, on average, every dollar invested in the OIG resulted in a 
return on investment of nearly 75 dollars to the federal government and American 
taxpayers. Over this period, the OIG identified more than $69 billion including 
questioned costs and funds recommended to be put to better use. The OIG offers an 
important investment for U.S. taxpayers, particularly in times of resource constraint. 
 
Statute of Limitations 
 
We are concerned that, unless Congress acts to extend the statute of limitations for 
fraud associated with pandemic‑related UI programs, many groups and individuals that 
have defrauded the UI program may escape justice. Even with the OIG’s tireless efforts, 
the current statute of limitations associated with UI fraud means federal law 
enforcement may still fall short in fully investigating and prosecuting the most egregious 
cases of UI fraud, especially given the volume and complexity of UI fraud matters we 
are tasked to investigate. Currently, the statute of limitations for many of these cases 
will expire in 2025 as the statutes most often used to prosecute UI fraud have 5-year 
limitations.  
 

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Pandemic-related UI fraud referrals that we receive often include complex schemes 
involving criminal enterprises and bad actors who use sophisticated techniques to 
maintain their anonymity. For instance, in a recent pandemic-related UI fraud 
investigation into the theft of over $4 million in UI benefits from a SWA, conspirators 
orchestrated a scheme to file UI claims using stolen identities, which were often 
associated with elderly citizens.58F59 The conspirators then opened bank accounts using 
the stolen identities for the sole purpose of having fraudulent UI proceeds deposited into 
them. They withdrew the fraudulent proceeds and purchased money orders made out to 
themselves and to an online vehicle auction company. The conspirators then laundered 
the UI funds by using the money orders to purchase salvaged automobiles in the United 
States and ship them to Nigeria. They also facilitated the transfer of conspiracy 
proceeds to overseas bank accounts in Nigeria. This complex fraud investigation 
spanned both domestic and foreign jurisdictions. The defendants have been convicted 
of conspiracy to commit wire fraud. 
 
Criminal investigations like this one require significant resources and time. Although the 
OIG is currently returning to pre-pandemic staffing levels due to limited resources, we 
had temporarily leveraged resources from Congress to hire more criminal investigators 
and significantly expand the number of staff reviewing UI fraud matters. We have also 
leveraged additional federal resources by partnering with DOJ and other federal law 
enforcement agencies. While these investigative resources have helped us address the 
incredible volume of UI fraud matters, the OIG anticipates identifying and investigating 
pandemic-related UI fraud until the statute of limitations expires, which, absent 
congressional action, will start to expire in early 2025.  
 
In August 2022, an extension of the statute of limitations was implemented for crimes 
involving the U.S. Small Business Administration’s Paycheck Protection Program and 
Economic Injury Disaster Loan program.59F60 Congress should likewise consider extending 
the statute of limitations for existing laws when pandemic-related UI programs are 
defrauded. The expansion of the statute of limitations would provide investigators and 
prosecutors time to effectively and efficiently pursue and hold accountable those who 
defrauded the UI program and victimized the American people during the pandemic. 
 
 
OIG Ongoing and Planned Work 
 
The OIG’s efforts to strengthen and protect the UI program continue. In addition to 
working with our law enforcement partners to combat fraud in the program, we will be 
issuing additional audit reports covering critical areas of concern and opportunities for 
improvement in the UI program.  
                                                          
59 DOJ, U.S. Attorney’s Office, Northern District of Alabama, “Georgia Resident Pleads Guilty to 
COVID-19 Unemployment Fraud Targeting Several States,” press release (June 8, 2022), available at: 
https://www.justice.gov/usao-ndal/pr/georgia-resident-pleads-guilty-covid-19-unemployment-fraud-
targeting-several-states 
60 The White House, “Bills Signed: H.R. 7334 and H.R. 7352,” (August 5, 2022), available at: 
https://www.whitehouse.gov/briefing-room/legislation/2022/08/05/bills-signed-h-r-7334-and-h-r-7352/  

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Planned and in-progress60F61 Phase 3 audit work includes: 
 
• ETA’s efforts to ensure UI program integrity;* 
• DOL’s oversight of emergency UI administrative transfers to states;* 
• ETA and state efforts to detect and recover overpayments;*  
• adequacy of state IT resources;* 
• adequacy of state staffing resources;* 
• effectiveness of programs for nontraditional claimants;* 
• effectiveness of the Temporary Full Federal Funding program;* 
• effectiveness of the Short-Time Compensation program;* 
• effectiveness of the Mixed Earners Unemployment Compensation program;* 
• effectiveness of the Emergency Unemployment Relief for State and Local 
Governmental Entities, Certain Nonprofit Organizations, and 
Federally-Recognized Indian Tribes program;* 
• PRAC Case Study Project on federal pandemic response funds in select 
geographic areas;*  
• concerns over use of third-party identity verification contractors;* 
• ETA and states’ efforts to address multistate claimants;* 
• ETA and states’ efforts to address claimants using the Social Security numbers 
of deceased persons;*  
• ETA and states’ efforts to address claimants using the Social Security numbers 
of federal prisoners;* 
• ETA and states’ efforts to address claimants with suspicious email accounts;* 
• concerns over data warehousing and analytics to prevent UI fraud;* 
• DOL and states’ oversight of UI claimants return to work; 
• ARPA Equity Grants; and 
• impact of waivers on UI overpayments, fraud investigations, and recoveries. 
 
 
Conclusion 
 
Mr. Chairman, the OIG remains committed to providing vigilant oversight of the UI 
program. As I discussed today, keeping fraud out of the UI program through 
preventative efforts and controls and quickly rooting it out when it occurs are requisite 
undertakings to ensure that unemployed workers receive much needed benefits without 
delay while protecting tax dollars directed towards sustaining the UI system. We will 
continue to work closely with Congress, DOL, and our law enforcement partners to keep 
these important benefits available for workers in need.  
 
Beyond our UI work, the OIG’s pandemic oversight continues to involve a substantial 
focus on other essential programs operated by DOL, including worker safety and health 
and employment and job training programs. We also continue oversight over numerous 
other areas including: combatting threats to the integrity of foreign labor certification 
                                                          
61 Audits in progress are marked with an asterisk (*). 

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programs, addressing the opioid crisis by fighting fraud against the Federal Employees’ 
Compensation Act program, and overseeing the efficiency and integrity of other 
important DOL programs and operations. 
 
Thank you for the opportunity to testify at today’s hearing. I would also like to take a 
moment to thank the dedicated employees of the OIG, who continue to work tirelessly in 
support of the agency and our essential oversight mission. 
 
I would be pleased to answer any questions you or the other members of the 
Committee may have.

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