Time’s Running Out: Prosecuting Fraudsters for Stealing Billions in Unemployment Benefits (February 6, 2025)
Summary
Hearing record Time’s Running Out: Prosecuting Fraudsters for Stealing Billions in Unemployment Benefits from American Workers, before the Subcommittee on Work & Welfare of the Committee on Ways and Means, House of Representatives, on February 6, 2025 (Serial No. 119–WW01). Opening statements are listed for Hon. Darin LaHood, Illinois, Chairman, and Hon. Danny Davis, Illinois, Ranking Member. Witnesses were Haywood Talcove of LexisNexis Risk Government Solution; Anna S. Hui, Director, Missouri Department of Labor and Industrial Relations; Jeff Ficke of Russell Allen Partners; and Shelbey Meyenburg, an Unemployment Insurance Worker with AFSCME Council 28 Washington Federation of State Employees. Member questions and public submissions follow.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Time’s Running Out: Prosecuting Fraudsters for Stealing Billions in Unemployment Benefits (February 6, 2025).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-119hhrg59658-9419c9aa5a/
, SHA-256 f3681ec8bee0ee1438f197d7e54a5556a4e117ab97f50d3abb833ff367d520d6.Full text
TIME’S RUNNING OUT: PROSECUTING
FRAUDSTERS FOR STEALING BILLIONS IN
UNEMPLOYMENT BENEFITS FROM
AMERICAN WORKERS
HEARING
BEFORE THE
SUBCOMMITTEE ON
WORK & WELFARE
OF THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
FEBRUARY 6, 2025
Serial No. 119–WW01
Printed for the use of the Committee on Ways and Means
(
U.S. GOVERNMENT PUBLISHING OFFICE
59–658 WASHINGTON : 2025
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 E:\HR\OC\A658.XXX A658
COMMITTEE ON WAYS AND MEANS
JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona JOHN B. LARSON, Connecticut
DARIN LAHOOD, Illinois DANNY DAVIS, Illinois
JODEY ARRINGTON, Texas LINDA SÁNCHEZ, California
RON ESTES, Kansas TERRI SEWELL, Alabama
LLOYD SMUCKER, Pennsylvania SUZAN DELBENE, Washington
KEVIN HERN, Oklahoma JUDY CHU, California
CAROL MILLER, West Virginia GWEN MOORE, Wisconsin
GREG MURPHY, North Carolina DON BEYER, Virginia
DAVID KUSTOFF, Tennessee DWIGHT EVANS, Pennsylvania
BRIAN FITZPATRICK, Pennsylvania BRAD SCHNEIDER, Illinois
GREG STEUBE, Florida JIMMY PANETTA, California
CLAUDIA TENNEY, New York JIMMY GOMEZ, California
MICHELLE FISCHBACH, Minnesota STEVEN HORSFORD, Nevada
BLAKE MOORE, Utah STACEY PLASKET, Virginia
BETH VAN DUYNE, Texas TOM SUOZZI, New York
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
RUDY YAKYM, Indiana
MAX MILLER, Ohio
AARON BEAN, Florida
NATHANIEL MORAN, Texas
MARK ROMAN, Staff Director
BRANDON CASEY, Minority Chief Counsel
SUBCOMMITTEE ON WORK & WELFARE
DARIN LAHOOD, Illinois, Chairman
MIKE CAREY, Ohio DANNY DAVIS, Illinois
RUDY YAKYM, Indiana JUDY CHU, California
MAX MILLER, Ohio GWEN MOORE, Wisconsin
AARON BEAN, Florida DWIGHT EVANS, Pennsylvania
NATHANIEL MORAN, Texas JIMMY GOMEZ, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
DMwilson on DSK7X7S144PROD with HEARING
(II)
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 E:\HR\OC\A658.XXX A658
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Darin LaHood, Illinois, Chairman ................................................................ 1
Hon. Danny Davis, Illinois, Ranking Member ...................................................... 2
Advisory of February 6, 2025 announcing the hearing ........................................ V
WITNESSES
Haywood Talcove, Chief Executive Officer, LexisNexis Risk Government
Solution ................................................................................................................. 4
Anna S. Hui, Director, Missouri Department of Labor and Industrial Rela-
tions ....................................................................................................................... 17
Jeff Ficke, Chief Executive Officer and Founder, Russell Allen Partners .......... 29
Shelbey Meyenburg, Unemployment Insurance Worker, AFSCME Council 28
Washington Federation of State Employees ...................................................... 41
MEMBER QUESTIONS FOR THE RECORD
Member Questions for the Record and Responses from Haywood Talcove,
Chief Executive Officer, LexisNexis Risk Government Solution ...................... 71
PUBLIC SUBMISSIONS FOR THE RECORD
Public Submissions .................................................................................................. 75
DMwilson on DSK7X7S144PROD with HEARING
(III)
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 E:\HR\OC\A658.XXX A658
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 E:\HR\OC\A658.XXX A658
(V)
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 1 here 59658A.001
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00005 Fmt 7633 Sfmt 7633 E:\HR\OC\A658.XXX A658
(VI)
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 2 here 59658A.002
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00006 Fmt 7633 Sfmt 7633 E:\HR\OC\A658.XXX A658
TIME’S RUNNING OUT: PROSECUTING
FRAUDSTERS FOR STEALING BILLIONS
IN UNEMPLOYMENT BENEFITS
FROM AMERICAN WORKERS
THURSDAY, FEBRUARY 6, 2025
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON WORK AND WELFARE,
COMMITTEE ON WAYS AND MEANS,
Washington, DC.
The subcommittee met, pursuant to call, at 2:00 p.m., in Sam
Johnson Room, 2020, Rayburn House Office Building, Hon. Darin
LaHood [chairman of the subcommittee] presiding.
Mr. LAHOOD. The subcommittee will come to order. I want to
welcome everybody today to our Work and Welfare Subcommittee
titled Time’s Running Out: Prosecuting Fraudsters for Stealing Bil-
lions in Unemployment Benefits from American Workers. I want to
welcome our witnesses here today and thank you for traveling to
be a part of this hearing.
And I want to also welcome our new members to the sub-
committee. A few of them are here. I want to welcome Rudy Yakym
from Indiana who is a new member of Ways and Means and the
subcommittee; Aaron Bean from Florida is a new member here, too,
and welcome back our old members, and he is not new to Ways and
Means but new to the subcommittee, Randy Feenstra from Iowa.
Randy, welcome to the Subcommittee on Work and Welfare.
As the returning chairman of the subcommittee, we have a
unique opportunity to build on our past bipartisan work and look
forward to working with all of you. My district that I cover is the
16th congressional district, which covers much of central and
northwestern part of Illinois. The purpose of today’s hearing is to
learn how Congress can hold fraudsters, how we can identify
fraudsters and other criminal organizations accountable by extend-
ing the statute of limitations for CARES Act-related unemployment
insurance fraud, which will expire on March 27th of 2025 without
congressional action.
The Ways and Means Committee has conducted considerable
oversight since the UI program’s weaknesses were exposed during
the COVID–19 pandemic. In February of 2023, the committee held
a hearing with the government witnesses from the GAO and the
Pandemic Response Accountability Committee who testified to
problems with outdated state systems and weak online security
that made the program vulnerable to fraud.
DMwilson on DSK7X7S144PROD with HEARING
(1)
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\HR\OC\A658.XXX A658
2
Subsequently, in May of 2023, the House passed the Protecting
Taxpayers and Victims of Unemployment Fraud Act. The bill would
have extended the statute of limitations for an additional five years
and incentivized states to go after fraud and recover funds. It also
included program integrity reforms to stop the pay and chase
model of benefit delivery. Unfortunately, those reforms fell short of
becoming law and Congressional action is needed now more than
ever.
All told, for the unemployment insurance program alone, GAO
has estimated between $100 and $135 billion were lost to fraud
during the pandemic. That number is astounding. Even more con-
cerning, the Department of Labor tells us that only $5 billion has
thus far been recovered. Meanwhile, we know law enforcement
agencies have thousands of cases currently pending. The Depart-
ment of Justice has charged more than 600 criminal UI fraud cases
with associated losses of over $300 million.
As of January 28th of this year, DOJ has more than 1,600 crimi-
nal matters that remain open and uncharged. Without an exten-
sion of the statute of limitations, these instances of suspected pan-
demic UI fraud will go unpunished. First and foremost, we need to
provide law enforcement with the tools and resources to hold
fraudsters accountable while pursuing reforms that can stop this
type of UI fraud from happening again. Congress must act to ex-
tend the statute of limitations. I hope that in the coming weeks we
can work together in a bipartisan fashion to pass legislation to do
just that and get a bill across the finish line before the March 27th
date.
In addition, we need to examine how international crime rings
and hostile nations continue to target the UI program. There are
countless examples of criminals, foreign and domestic, deploying
sophisticated schemes to defraud the government and UI recipi-
ents. For example, my staff recently shared with me a press release
from the Department of Justice shown on the board behind me
here announcing that a Pennsylvania man pled guilty to obtaining
$59 million in public benefits, including unemployment and laun-
dering the proceeds to China. As a member of the House Select
Committee on China, cases like this are deeply concerning to me
and can confirm our worst fears regarding the attacks on our insti-
tutions by hostile nations such as the CCP, the Communist Chi-
nese Party.
I strongly believe we have a responsibility to bring accountability
back to Washington and find out what we can do to bring restitu-
tion for taxpayers in the face of such staggering amounts of fraud.
There is a lot more work to be done to hold these criminals ac-
countable through the criminal justice system, and recoup the bil-
lions of dollars on behalf of American taxpayers.
So, again, I want to thank our witnesses for being here today,
for traveling, their valuable time, and their insight that we will
hear from a little bit later here. With that, it is now my pleasure
to recognize the gentleman from Illinois, our ranking member
Danny Davis.
Mr. DAVIS. Thank you, Mr. Chairman, and I, too, want to wel-
come all of our members back of this subcommittee and to our wit-
DMwilson on DSK7X7S144PROD with HEARING
nesses today. For certain, Democrats want to hold criminals that
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00008 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
3
stole from workers in our unemployment insurance or UI program
during the pandemic accountable unequivocally and without a
doubt. We provided $2 billion in the American Rescue Plan Act to
strengthen program integrity, access, and equity. Democrats want
to work on a bipartisan basis to finish the job.
However, I cannot begin this hearing and pretend that business
is usual in the face of illegal and unethical actions by this adminis-
tration. I must recognize and criticize the firing of the Department
of Labor Inspector General whose job it was to investigate and
prosecute UI fraud and who specifically asked our committee to ex-
tend the statute of limitations for UI fraud.
Inspector General Larry Turner served with distinction in both
the Trump and Biden administrations and led the Inspector Gen-
eral’s Office to 1,400 successful pandemic UI fraud prosecutions
and over $1 billion in court-ordered restitution and payment.
Mr. Turner was recently fired by President Trump along with
nearly all of the non-partisan inspectors general. After firing these
IGs charged with prosecuting fraud and making sure agencies fol-
lowed the law, the Trump administration illegally blocked states
from accessing essential health, childcare, child welfare, and other
funding authorized and appropriated by Congress and illegally
blocked nonprofit organizations from accessing already appro-
priated funds just as they were trying to make payroll. The harm
done by short delay in payments gave us a preview of what might
happen if we enacted the cuts being pushed by my Republican col-
leagues.
In the last few days, President Trump gave Elon Musk, an
unselected billionaire, and his hackers unfettered access to the ex-
tremely confidential data regarding payments to workers, busi-
nesses, seniors, and entities around the world via the systems with
the Treasury Department centers for Medicaid and Medicare,
Labor Department, and NIH. These systems include private finan-
cial information for seniors receiving social security or Medicare,
workers receiving tax refunds, private health information about
you and your loved ones, and the privileged information of Mr.
Musk’s business competitors.
This hearing is about preventing fraud, yet this administration
appears to be gifting Mr. Musk the unlimited ability to defraud in-
dividual Americans to access their most private financial and
health information while inappropriate. Will Mr. Musk illegally
stop your social security, tax, Medicare, Medicaid, or disability pay-
ment? Will he claw back your tax refund or social security payment
if he thinks you didn’t deserve it? Will he use his unchecked power
to sell your social security numbers or bank account information to
the highest bidder or delay government contract payments or
grants to his competitors or people he dislikes?
As much as my colleagues and I want to finish the job of pros-
ecuting pandemic fraud and ensure that the unemployment system
is ready for the next recession, I cannot ignore the silence of my
Republican colleagues in this offensive fraud against the American
public. And the sad reality is that the next recession might be very
soon given the President’s determination to start trade wars with
our closest allies that will skyrocket prices on nearly everything
DMwilson on DSK7X7S144PROD with HEARING
Americans buy.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
4
I look forward to hearing from Shelby Meyenburg and getting
good advice from the workers on the front lines of making sure that
state UI programs pay the right workers the right amount at the
right time. Yet I am also extremely concerned that any new inspec-
tor generals in this current lawless environment would not appro-
priately target true criminal rings and instead focus on the workers
unemployed during the pandemic who received overpayments due
to no-fault of their own.
The first step, the very first step, Mr. Chairman, is for our com-
mittee to work together to protect the privacy and prevent the de-
frauding of the American people.
I thank you very much and yield back the balance of my time.
Mr. LAHOOD. Thank you, Mr. Davis, for your opening state-
ment. I will now turn to our witnesses here today and I will intro-
duce them here in a second. Again, thank you for being here today
and look forward to your testimony and our questions and answers
from the committee members.
I will introduce from my left to right. Our first witness is Hay-
wood Talcove, who is the chief executive officer of LexisNexis Spe-
cial Services Incorporated in McLean, Virginia.
Next we will hear from Ms. Anna Hui, who is the director of the
Missouri Department of Labor and Industrial Relations in Jeffer-
son City, Missouri.
Thirdly, we will hear from Jeffrey Ficke, who is the CEO and
founder of Russell Allen Partners in Cincinnati, Ohio.
And lastly, we will hear from Shelby Meyenburg, who is an un-
employment insurance worker with the Washington Federation of
State Employees. Welcome to you all.
We will begin with you, Mr. Talcove. You are recognized for five
minutes to deliver your opening statement.
STATEMENT OF HAYWOOD TALCOVE, CHIEF EXECUTIVE OFFI-
CER, LEXISNEXIS SPECIAL SERVICES INCORPORATED,
MCLEAN, VIRGINIA
Mr. TALCOVE. Chairman Smith, Chairman LaHood, Ranking
Member Davis, and distinguished members of the committee,
thank you for the opportunity to speak on fraud and government
assistance programs. During the pandemic, we witnessed a health
crisis and then a massive wave of fraud that shockingly continues
today. Domestic and transnational criminals likely stole $1 trillion
across all the systems programs meant to help needy Americans.
The money was used to traffic drugs, traffic children, and threaten
our democracy.
COVID–19 was neither the first nor will it be the last disaster
to test this nation. Just this past year we witnessed storms de-
stroying whole communities in North Carolina and wildfires that
burnt across southern California, and once again we are seeing the
criminals attack at scale. Fraud is a financial problem, fraud is a
national security problem, and fraud is a human problem.
I would like to suggest three proven solutions that can signifi-
cantly reduce this transfer of assets to criminal organizations.
Number one, apply identity verification on the front end; number
two, end self-certification; and number three, continuously authen-
DMwilson on DSK7X7S144PROD with HEARING
ticate beneficiaries. For too long the government has treated iden-
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
5
tity verification as an afterthought. For years we have seen the cat-
astrophic result. Criminals from across the globe flooding state and
federal systems, stealing trillions meant for Americans.
We must finally understand that pay and chase does not work.
In fact, of the $250 billion stolen from taxpayers from the unem-
ployment insurance program during the pandemic, less than $5 bil-
lion has been recovered thus far. Criminals do this because the
pandemic taught them that government programs are the mark.
They never run out of money and you likely won’t be arrested. If
we fail to act, we are complicit in funding fraudsters, organized
criminals, nation states, and even terrorists who use these pro-
grams as their personal checking accounts.
At the beginning of the pandemic, I spoke with a state UI direc-
tor who assured me her program had no fraud. Three short weeks
later, they had more benefit claims than residents over the age of
18. Criminals move faster than government systems. But fraud
does not stop at the door. It is just not external actors gaming the
system. Insiders, corrupt employees, and contractors steal from the
programs taking advantage of their access to systems and pass-
words bilking the very people they are supposed to be serving.
Today the threat is growing exponentially. AI-powered fraud net-
works generate fake identities that pass dated misverification
standards from 2017. Frauds file thousands of applications in sec-
onds. Deep fake technology generates, quote, unquote, real people
that bypass security safeguards. Criminals are evolving in
realtime. Our response must be just as fast, just as smart, and just
as relentless.
To stop this, we need AI, we need data sharing, and we need
changes to the 1974 Privacy Act. Fraud is a data problem and can
be mitigated in today’s world. Fraud on this scale is not inevitable.
It is the result of legacy systems, outdated and complex regula-
tions, lack of data, and failure to act. This is all achievable today.
Taxpayers do not want their funds going to criminal groups. The
funds should go to those in need. I am not suggesting we need tech-
nological breakthroughs. The solutions are clear tested and avail-
able now and used by the private sector whose fraud rate is less
than 3 percent compared to 20 percent in the public sector.
If we do the following: Number one, verify identities; number
two, eliminate self-certification; and number three, continuously
authenticate beneficiaries, then we can restore integrity to our as-
sistance programs, ensure taxpayer dollars reach those who truly
need them, and prevent criminals from exploiting the American
people. I would also urge you to extend the statute of limitations
related to the CARES Act that expires on March 27th.
We are failing the single mother who relies on food assistance,
the unemployed worker who genuinely needs support, and families.
We are also failing the taxpayer by allowing around $1 trillion an-
nually to be lost to fraud and improper payments.
Thank you, Chairman Smith, Chairman LaHood, Ranking Mem-
ber Davis, and members of the committee for the opportunity to
testify today.
DMwilson on DSK7X7S144PROD with HEARING
[The statement of Mr. Talcove follows:]
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00011 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
6
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 3 here 59658A.003
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
7
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 4 here 59658A.004
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00013 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
8
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 5 here 59658A.005
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00014 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
9
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 6 here 59658A.006
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
10
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 7 here 59658A.007
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00016 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
11
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 8 here 59658A.008
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00017 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
12
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 9 here 59658A.009
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
13
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 10 here 59658A.010
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
14
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 11 here 59658A.011
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00020 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
15
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 12 here 59658A.012
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
16
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 13 here 59658A.013
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00022 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
17
Mr. LAHOOD. Thank you, Mr. Talcove.
We will now turn to Ms. Hui. You are now recognized for five
minutes.
STATEMENT OF ANNA HUI, DIRECTOR, MISSOURI DEPART-
MENT OF LABOR AND INDUSTRIAL RELATIONS, JEFFERSON
CITY, MISSOURI
Ms. HUI. Chairman LaHood, Ranking Member Davis, and distin-
guished committee members, my name is Anna Hui and I am the
director of the Missouri Department of Labor and Industrial Rela-
tions and have served in that position since 2017. I thank you and
Chairman Smith for the invitation to come today and testify before
you all.
Our division of employment security administers our state’s un-
employment insurance or UI program and was responsible for ad-
ministering pandemic unemployment programs. I am proud that
Missouri is consistently among the nation’s leaders in preventing
improper UI payments, providing benefits to the rightful recipients,
and along with state agency partners, providing high quality reem-
ployment services to unemployed Missourians.
But first let me explain the basics of regular unemployment in-
surance. Imagine you are purchasing car insurance. You pay pre-
miums. In turn, the insurance company covers potential losses like
car accidents. The more accidents you have, the higher your pre-
miums. Conversely, a clean driving record can lead to lower pre-
miums.
The UI program operates similarly. Employers pay taxes and
those funds provide temporary partial income support to eligible
workers who lose their jobs through no fault of their own. The sys-
tem encourages employers to maintain a stable workforce, mini-
mize layoffs, and reduce the number of claims filed against their
accounts. Just as your car insurance premiums will increase with
accidents, an employer’s UI tax rate increases with frequent valid
claims. This built-in incentive motivates employers to actively par-
ticipate in the claims process and creates a greater likelihood that
only legitimate claims are paid out. Additionally, individuals filing
for unemployment insurance not only have to meet eligibility re-
quirements for the initial claim, but also every week they make a
request for benefits.
Prior to the pandemic, UI fraud typically involved claimants fail-
ing to meet work search requirements or receiving benefits while
employed. That was essentially what traditional improper pay-
ments were. However, the pandemic dramatically shifted the land-
scape. Fraud evolved to encompass large scale identity theft with
criminals stealing personally identifiable information, PII, to file
fraudulent claims. This shift was driven by the massive influx of
money into the system and the rush to distribute it making tradi-
tional safeguards less effective.
In Missouri, we are fortunate to have already put in place in
2016 a modernized information technology system, advanced fraud
detection methods, and tools and partnerships with third-party
vendors specializing in fraud prevention. Additionally for years,
Missouri has been a member of the National Association of State
DMwilson on DSK7X7S144PROD with HEARING
Workforce Agencies, NASWA, Integrity Center and has actively
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
18
participated in the integrity data hub. This multifaceted approach
was and is still critical to our success, to the integrity of Missouri’s
UI system, and to the value of every tax dollar.
With the right systems, tool, and partnerships, stopping UI fraud
is not impossible, but extending the statute of limitations for
CARES Act related UI fraud and overpayment recovery is crucial.
The current deadline is March 27 of 2025 and it looms large. With-
out an extension, prosecutions will be impossible after that date al-
lowing criminals to escape justice and potentially leaving billions
of dollars in overpayments due to fraud unrecovered. This is unac-
ceptable.
Beyond extending the statute of limitations, broader UI program
reforms are essential as proposed in H.R. 1163, the Protecting Tax-
payers and Victims of Unemployment Fraud Act. We must move
away from the pay and chase model, which is inherently vulnerable
to fraud, and implement more robust preventative measures.
The current Department of Labor administrative funding model
often penalizes efficient states. Its heavy reliance on workload is a
means to redistribute funds can serve as a deterrent for states to
pursue transformative efficiencies. This disincentivizes efficiency
and perpetuates systemic problems. The current funding model
plays catch up to actual program needs, especially during economic
downturns. It is also a disincentive to long-term investment as a
short-term nature of some funding sources discourages the state
from making critical investments in technology and cybersecurity
that incur ongoing costs for licensing, maintenance, and support.
In 2023, Missouri businesses paid approximately $130 million in
federal unemployment tax act, food to taxes, to the U.S. Treasury,
yet Missouri only received $38.5 million in UI program administra-
tive funding from DOL. This chronic underfunding forced us to
lobby for state funds in the Missouri legislature to shore up fund-
ing for our UI program and create a long-term modernization plan.
For every state UI administrator in the U.S., this situation is
unsustainable. In line with NASWA’S 2025 legislative priorities,
dedicated technology funding should be a separate consistent
stream for modernization, including cybersecurity AI and data ana-
lytics.
Finally, adequate funding investments in modernization remain
relevant and secure and we must make sure that ongoing mainte-
nance and support are there. The pandemic underscored the need
for modern resilient secure UI system. By prioritizing accuracy, in-
vesting in technology, and reforming the funding model, we can en-
sure that the UI program continues to serve its vital function pro-
viding a safety net to workers during times of economic hardship
while safeguarding the integrity of the system and the trust of the
American people.
Thank you. I am happy to answer any questions you may have,
and as this is a public forum, I cannot provide any specific details
to the fraud measures that we have in place in Missouri.
[The statement of Ms. Hui follows:]
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00024 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
19
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 14 here 59658A.014
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
20
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 15 here 59658A.015
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00026 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
21
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 16 here 59658A.016
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
22
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 17 here 59658A.017
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00028 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
23
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 18 here 59658A.018
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
24
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 19 here 59658A.019
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00030 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
25
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 20 here 59658A.020
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
26
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 21 here 59658A.021
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
27
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 22 here 59658A.022
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
28
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 23 here 59658A.023
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
29
Mr. LAHOOD. Thank you Ms. Hui.
We will now turn to Mr. Ficke. You are recognized for five min-
utes.
STATEMENT OF JEFFREY FICKE, CEO AND FOUNDER OF
RUSSELL ALLEN PARTNERS, CINCINNATI, OHIO
Mr. FICKE. Thank you, Chairman LaHood, Ranking Member
Davis, and members of the subcommittee. I want to thank you for
the opportunity to present. My name is Jeff Ficke and I am the
CEO of Russell Allen Partners located in Cincinnati, Ohio. My en-
tire career is focused on technology, innovation, and operations
around payments. I will give you a little background about that,
because it covers government and financial services.
In the ’90s I was a founding member of a payments company
that supported government service organizations, several federally
funded state-operated programs including unemployment. After
that company was sold, I moved to the financial services industry
working for Fifth Third Bank. I led central operations which trans-
ferred approximately $14 trillion a year in funds using ACH wire
card and check. After that I moved on to run Fifth Third’s commer-
cial payments line of business for the last six years of my career
in banking.
Before I present about the opportunities I see exist between
these agencies and financial services, I want to discuss my role in
the pandemic and the unemployment. At that time, early phase of
the pandemic, the pandemic unemployment assistance program
was being deployed to those not eligible for traditional unemploy-
ment. Ohio was experiencing cybercrime attacks that resulted in
Ohio reporting about $1.8 billion in fraudulent overpayments. $1.4
billion was for PUA and about $400 million were about traditional
unemployment. I do understand that today the COVID-era pan-
demic unemployment support is due to expire. I would encourage
that to be extended.
I want to start by explaining my involvement in Ohio. It started
in 2021. My expertise in government services and banking aligned
well with Ohio’s needs. I was named to run Ohio’s public private
partnership. The volume of claims were skyrocketing, the
unadjudicated claims and backlog was growing out of control, and
citizens in crisis to the agency were overwhelming.
Governor DeWine made the decision to engage the private sector.
He worked directly with the Ohio Business Roundtable, a group of
about a hundred of Ohio’s largest public sector CEOs to engage
their membership for expertise. The Ohio Business Roundtable is
run by former U.S. Congressman Pat Tiberi. Governor DeWine rec-
ognized that the private sector had experience in these crisis situa-
tions. My role was to lead the coordination of all these activities
between Ohio’s Department of Jobs and Family Services and the
private sector.
We provided advice and guidance during the execution of these
recommendations. We had access to senior leaders in these—from
places like Fifth Third Bank, Western Southern, KeyBank, Nation-
wide Insurance, and others. As I had testified multiple times that
I had to testify, had the opportunity to testify multiple times in
DMwilson on DSK7X7S144PROD with HEARING
front of the state’s legislative subcommittees. Governor DeWine
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
30
and ODJFS’s director Matt Damschroder gave three clear objec-
tives at that phase. The first goal was to stop the fraudulent claims
from being submitted. In early 2021, the state was receiving over
a million claims a month for new unemployment claims and POA
claims.
With advice from the private sector and ODJFS team, we were
able to deploy a new fraud stack, and that happened within the
first 60 days of our engagement. The results were overwhelming.
New fraud claims—new unemployment claims dropped in two
months to less than 25,000 a month. Over a 97 percent reduction
in fraud with a new set of technology that was deployed.
LexisNexis was a key partner for us at that point in the process.
And you can see on the graphic some of the reductions that took
place as a part of the PUA.
The second objective was really clear. There was approaching 5
million unadjudicated claims-related issues. We actually took a
new approach to actually engage the big data corporations, data
analytics teams to actually help us to accelerate that. We did take
advantage of programs that were completed by Innovate Ohio, ad-
vanced data analytics platform supported by then Lieutenant Gov-
ernor John Husted, who is now a U.S. senator for Ohio. The P3
team engaged subject matter experts from the private sector and
big tech to help segment those. Within 90 days of the project start-
ing, Ohio had all fraud free claims for Ohio citizens had been adju-
dicated and proper payments were being sent.
The third goal was to answer questions from enormous volume
of citizens. Many Ohioians were victims of cybercrime while others
who needed benefits were not being processed because of the back-
log. During this period the service centers were overwhelmed. Citi-
zens experienced difficulties getting through and sometimes had up
to a six hour hold time. You can see in the chart that is displayed
here that we returned all those to commercially acceptable stand-
ards with call times—call handle times increased and call times—
hold times less than three minutes.
The governor’s reasoning for seeking this advice and collabora-
tion, Ohio’s sector proved to be an outstanding decision. I also want
to acknowledge that Ohio’s ODJFS employees welcomed the sup-
port, worked endless hours to deliver, and truly cared about every
citizen who needed the support from the organization.
And the last segment I want to talk about is what I feel is a
partnership that can exist between government and financial serv-
ices. Collaboration. One of the key initiatives launched at the direc-
tion of Director Damschroder was to understand that if there was
any funds that would be available and left to be returned, we did
confirm—we started by confirming our understanding of how this
money flowed from initial claims. The traditional unemployment
PUA program solutions required claims adjudication that—as well
as collection of payment history. Programs checks were focused on
claimants payments were sent to the——
Mr. LAHOOD. Mr. Ficke, I am just going to interrupt you there
for a second. You are a little bit over. We are going to ask you to
just pause there if you don’t mind and we will take the rest of your
DMwilson on DSK7X7S144PROD with HEARING
statement, for the record, if you don’t mind doing that.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
31
Mr. FICKE. Sure. I just want to talk about future recommenda-
tions and I will pause. First of all, the banks and the agencies are
both accountable to multiple regulatory organizations. Aligning
them so that we can actually get data sharing between the banks
and the agencies is a very clear opportunity.
Secondly, the digital payment networks in this space have actu-
ally introduced new threats, new opportunities, and, for example,
PayPal returned almost $70 million to the State of Ohio on money
that they held. Not all fraud—not all mobile payment networks had
that kind of diligence.
The third opportunity is that the—excuse me, fourth, the banks
also are a point where they can follow sheet metal law, which
would actually allow the funds to be held for a period of time and
then returned into unclaimed funds. I don’t understand how that
is going to actually play out in the long run and issues that still
need to be determined.
I understand the statute of limitations. I do encourage it to be
passed along with House Bill 1163. We have spoken at multiple
NASWA and UWC conferences on it. We look forward to answering
your questions. Thank you again.
[The statement of Mr. Ficke follows:]
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
32
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 24 here 59658A.024
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
33
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 25 here 59658A.025
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00039 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
34
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 26 here 59658A.026
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
35
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 27 here 59658A.027
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00041 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
36
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 28 here 59658A.028
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00042 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
37
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 29 here 59658A.029
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00043 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
38
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 30 here 59658A.030
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00044 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
39
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 31 here 59658A.031
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00045 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
40
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 32 here 59658A.032
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
41
Mr. LAHOOD. Thank you very much.
Lastly, we will recognize Mr. Meyenburg. You are recognized for
your opening statement.
STATEMENT OF SHELBY MEYENBURG, UNEMPLOYMENT IN-
SURANCE WORKER, WASHINGTON FEDERATION OF STATE
EMPLOYEES
Mr. MEYENBURG. Okay. Good afternoon, Chairman LaHood,
Ranking Member Davis, and members of the subcommittee. My
name is Shelby Meyenburg. I am an employment service worker in
the State of Washington. In this role I also help UI claimants file
their benefits. I am a proud member of AFSCME Council 28 and
the Washington Federation of State Employees Local 443.
I help Washingtonians file for unemployment insurance and safe-
guard the UI system against fraud. My job is to get the right bene-
fits to the right people on time.
In 2020 the pandemic hit Washington State quickly. Our state
unemployment rate rose from 5.1 percent in March to over 15 per-
cent in April immediately placing a lot of stress on our system. Un-
like other states, Washington hired non-permanent staff instead of
outsourcing UI work during the pandemic. I was one of those non-
permanent staff. At this time, non-permanent staff had received
less than half of the normal training for the UI program. It was
a chaotic and challenging time where UI claimants were desperate
and the caseloads were enormous.
In the spring of ’22 I was laid off from my non-permanent posi-
tion and had to file for unemployment benefits myself. It was a
humbling experience to go from processing UI claims to applying
for UI. After being laid off, I applied for a permanent position
under the state’s merit-based personnel system and was hired in
July of ’22. My evolution from non-permanent to permanent staffer
showed me the value of being a highly skilled employment service
worker who understands the complexities of the UI program.
UI workers are the first line of defense protecting hard-earned
benefits from fraud. We safeguard the system with identity checks,
reviewing and securely transmitting personally identifiable infor-
mation. We help jobless workers make sense of the sometimes con-
fusing language in the UI program. As an example, we let them
know when they should file for an appeal.
We resolve complex claims, which takes training, a deep under-
standing—deep knowledge of the program, persistence and dedica-
tion to our mission. This is important work that highly skilled and
well-trained UI workers do every day for American workers.
UI workers hired under a merit-based personnel system as re-
quired under federal law ensures that the services provided to job
seekers and employers across the country are unbiased and high
quality. UI workers cannot have any other interest that play other
than serving the jobless workers and maintaining the integrity of
the UI program.
There are ways to prepare for future surges in unemployment
without undermining merit staffing. One solution is for states to
cross-train existing merit staff for other programs to process UI
claims. I am a cross-trained employment service worker, what we
DMwilson on DSK7X7S144PROD with HEARING
call a UI ambassador. If a state experiences a surge of unemploy-
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00047 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
42
ment claims, these cross-trained merit staff state employees would
receive a brief refresher training and be able to hit the ground run-
ning in order to help workers and keep our system and commu-
nities moving forward.
As you work together on UI reform, I urge that you talk to UI
workers directly as they are the subject matter experts. We want
to protect the UI system and make sure that it works well enough
for everyone and protect the system from fraud. We can accomplish
these goals with increased funding for staffing, IT modernization,
program improvements, and cooperation between the state and fed-
eral levels, not by outsourcing the work much skilled merit-based
UI staff.
I would like to thank the chair, ranking member, and members
of the subcommittee for the opportunity to testify today.
[The statement of Mr. Meyenburg follows:]
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00048 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
43
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 33 here 59658A.033
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00049 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
44
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 34 here 59658A.034
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00050 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
45
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 35 here 59658A.035
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00051 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
46
Mr. LAHOOD. Thank you, Mr. Meyenburg, for your testimony
here today.
I will now move to questions from the committee members to our
panelists today. Again, grateful for your contributions here today
to this important topic. I will now recognize myself for my ques-
tioning.
I am going to start with you, Mr. Talcove. For years this com-
mittee has been sounding the alarm really on fraud from organized
criminal organizations, particularly from a number of hostile na-
tions, Russia, China, and others. As you saw in my opening state-
ment, I referred to a case in Pennsylvania involving a defendant
caught laundering money back to China. These cases are complex.
They are nuanced, involve federal crimes, but they also raise seri-
ous national security concerns. Mr. Talcove, can you explain the
current state of the UI fraud and how international criminal orga-
nizations are continuing to be associated with fraudulent activity.
Mr. TALCOVE. Yeah. Thank you very much for the question. It
is interesting in that I was just out in California, in L.A. this week,
and the fires are going there, and you are now seeing the same
groups that stole at scale in California $32.6 billion from the unem-
ployment insurance program, they are now stealing from the dis-
aster unemployment insurance, the disaster SNAP program.
So what these criminal groups do, and in particular China, Rus-
sia, Nigeria, Romania, is they use stolen information. Some of it
they collect it directly. For example, China, when they had the
OPM breach years ago, they have all that information, and they
file claims on behalf of legitimate individuals in the afflicted areas,
and then they use that money for just terrible things.
And what I find incredibly frustrating having followed fraud
since Hurricane Katrina in 2006, it is the same groups doing the
same thing. And if you just apply data and analytics, just as Mr.
Ficke was showing on those charts, you can stop it, but we con-
tinue to allow these groups to steal. They use the money for hor-
rible things, child trafficking. They use it for drugs in our commu-
nities. They use it for terrorism. So I would like to tell you that
things are better today, but just watching what is going on in Cali-
fornia, seeing what happened in North Carolina, same groups,
same playbook, stealing at scale.
Mr. LAHOOD. Thank you for that. Just to follow up, you know,
in terms of criminal prosecutions that have been successful, are
there any that come to mind that have had somewhat of a deter-
rent effect on continuing criminal activity?
Mr. TALCOVE. Yeah. So I would give Washington State credit.
During the pandemic they were the first group to get hit by a Nige-
rian fraud organization. They actually did capture the ringleader
in that. But for the most part, these people do not live in this coun-
try. They will never come to this country. They are protected by
their states, and that is why you have to protect things on the front
end. You can’t let the money out.
Now, if it does go out, remember my estimate, $250 billion was
stolen, $5 billion recovered. If it does go out, state and local law
enforcement can’t do it. You need the Secret Service and you need
the FBI, because these are complicated multifaceted criminal enter-
DMwilson on DSK7X7S144PROD with HEARING
prises.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00052 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
47
Mr. LAHOOD. Thank you for that. I am going to turn now to Ms.
Hui. In your testimony, you mentioned the Missouri Department of
Labor. They currently have a UI program that’s effective in pre-
venting improper payments and providing high quality re-employ-
ment services. Last Congress Ranking Member Davis and I worked
on a bill called the Bridge to Workers Act that was passed into law
to provide the flexibility states need to strengthen those connec-
tions to employment. Can you talk about the work with re-employ-
ment services and how you see that growing and developing into
a core part of unemployment programing in the future.
Ms. HUI. Certainly. Thank you for the opportunity to answer
your question, and thank you, Chairman LaHood and Ranking
Member Davis, for actually getting the Bridge for Workers Act
passed. It has really afforded states a great deal of flexibility to ap-
proach individuals that have potentially more challenges to actu-
ally getting back to work. Missouri was one of the few states that
actually kept our re-employment and eligibility assessment pro-
gram, RESEA, going during the pandemic. And by having this ex-
pansion of flexibility to allow for states to better address what their
local workforce needs are and basically providing targeted profes-
sional workforce development services to individuals, originally it
was for folks who are most likely to exhaust their benefits, but
now, again, it allows states to really be able to better fit what their
local state needs are.
This program in particular has the built-in component that when
we require somebody to report for these required workforce serv-
ices, if they are utilized unemployment benefits, their benefits are
not continued if they don’t report for those. So it builds in that in-
centive, again, to make sure that workforce services that are need-
ed are actually being taken and, again, to stress the re-employment
roots of unemployment itself, right? Because we really see that un-
employment and workforce services as part of the two sides to the
same coin. It is really about making sure that workers have the
services and support needed to get back to sustainable employ-
ment.
Mr. LAHOOD. Thank you for that, Ms. Hui.
Mr. Ficke, in your testimony, you described how you were re-
cruited by Governor DeWine in Ohio to help right the ship recov-
ering over $400 million in fraudulent benefits held by banks and
automated payment networks. I am particularly interested in that
success story, because according to a report issued by the Illinois
Auditor General in my home state, we lost approximately $5 billion
and only $189 million has been recovered. Can you talk about how
you were able to turn that around in Ohio through your UI pro-
gram and recoup the funds.
And then maybe before you answer that, we have heard the ex-
pression ‘‘pay and chase.’’ Can you explain for the members of the
Committee what that means, and what that is.
Mr. FICKE. Well, first of all, with the pay and chase, I might
defer that to——
Mr. LAHOOD. Well, maybe answer my question on how you did
that, and I will have Mr. Talcove answer the pay and chase.
Mr. FICKE. Absolutely. Thank you for your question. I think it
DMwilson on DSK7X7S144PROD with HEARING
is really important to understand how much manual effort and per-
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00053 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
48
sonnel effort went into actually discovering these funds. At the
very early phases of our opportunities to recover funds, we
partnered very well with the leadership of Ohio Jobs and Family
Services, and we would ask a simple question. Is there still money
out in the networks to be able to do this.
I think it is really important fundamentally to understand that
in the UI claims environment for approval on adjudication, there
is a lot of work done to identify an individual. In the banking in-
dustry, when payments flow through, especially since 9/11, post
that period, there is regulation that is also very tightly covered by
the banking industry, financial services that actually require them
to not allow money to get out of banks into the hands of fraudsters.
The one looks at identity and the banking system can look at activ-
ity within a bank within specifically a bank account.
In a very simplistic level, it is looking at multiple unemployment
claims from multiple states going into the same accounts, unusual
spending happening within those financial service institution ac-
counts, large overseas transactions that actually are pulling money
out of a consolidation to pull them overseas. That effort has re-
sulted in the U.S. banking industry setting up multiple advanced
analytics programs, case workers, and processes to actually prevent
that from happening.
The difficult work we had in that is that we are actually required
at that point to work with all the banks who received funds. They
didn’t have a specific contractual relationship with each individual
state because they were the receiving banks. Simplifying it, it basi-
cally means that is the bank of the claimant who was actually get-
ting the information. And in our case, that required us to go be-
yond the individual head of ACH or operations leaders and get to
the newly established or recently established groups within the
banks that actually allowed those fraud measures to be kept in
place. We were able to find the money. We were able to confirm
it. We actually coordinated activities to compare data between
fraudulent—potential fraudulent claims at the state with fraudu-
lent account activity, identify what was remaining.
What ended up happening in that case is that we actually then
had to have legal agreements, sometimes referred as hold harmless
agreements, limitations of liability that actually had to be executed
post this whole process happening. Many banks cooperated.
I will give credit to ODJFS, because Director Damschroder made
it a clear initiative he wanted those funds back. We prioritized it.
They invested people and time and energy into it, and we got great
cooperation from many financial institutions.
Mr. LAHOOD. Thank you for that. Maybe quickly, Mr. Talcove,
you have used the expression ‘‘pay and chase.’’ Tell members of our
audience and the committee members what that means.
Mr. TALCOVE. I believe it is a false paradigm that says that you
can’t have speed in security, and I would just reference that most
of you have probably used Amazon. You placed an order, it gets
there quickly, and everything works out really well for you.
In government, sometimes what they do is they would rather just
pay it really quickly and then try to get the money back later. And
as you noted in your opening statement, only $5 billion of the $250
DMwilson on DSK7X7S144PROD with HEARING
billion has been returned.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00054 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
49
The second point I want to make on that, I would encourage you
to try to go and look on your state’s UI page and try to fill out an
unemployment insurance form. Sometimes the overpayments or
underpayments are related to the complexities of the forms, and it
really does create a whole set of backlogs for those that are admin-
istering the programs. Those forms are complicated.
Mr. LAHOOD. Thank you for that. I will now recognize the rank-
ing member Mr. Davis for his questions.
Mr. DAVIS. Thank you, Mr. Chairman, and thanks to all of our
witnesses.
Mr. Meyenburg, let me ask you, given that Elon Musk and hack-
ers with no security training, our policy expertise now have unlim-
ited access to confidential financial and health data for workers
and businesses. I am going to talk a little bit about how we are
supposed to safeguard data. As a front-line UI worker, you collect
confidential identity and banking information. What kind of train-
ing do you have to keep that data safe and private?
Mr. MEYENBURG. So during initial UI worker training, there
is a heavy emphasis on how to properly conduct identity informa-
tion verification. Throughout the entire process, six to eight weeks,
you are constantly having to do that process. There is role playing
scenarios that covers a lot of topics, and during all of those you do
have to conduct the correct identification verification.
There is several reasons why a UI claimant’s identity would be
flagged for further review. If I clearly spot fake information or
misdocumented information, I have to send that up for review. If
a claimant’s personal information does not match what is on the
state’s driver’s license system, that one’s also flagged for review by
the fraud team. We work together to safeguard the UI benefits
from fraud and we also ensure that we are using our training and
experience to help claimants who have challenges accessing bene-
fits because they are not tech savvy. This is why the role of a UI
ambassador who can see through those challenges to help a worker
in need is so critical.
Mr. DAVIS. Why is this information safer when we limit access
to public employees like yourself?
Mr. MEYENBURG. It is safer because we have no ulterior mo-
tive. We are there to help the people of Washington State in my
case. We don’t have to worry about those expectations of a quota
system, or anything like that. We meet the people where they are
at and we help them where they are at.
Mr. DAVIS. Let me just re-emphasize that my democratic col-
leagues and I are strongly committed to good service by workers
like yourself and especially people who have no need to access their
earned unemployment benefits. We are committed to preventing
fraud and safeguarding the UI trust fund. I am grateful to you and
your colleagues and especially to AFSCME Council 31 workers in
Illinois for their critical work. Is there anything that we have to
give up in order to do both, provide the good service and have no
other purpose for doing it, ulterior motives?
Mr. MEYENBURG. I don’t believe so. I believe we can accom-
plish both goals at the same time. In fact, this is built into our
process. Before we talked to a UI claimant about their benefits, we
DMwilson on DSK7X7S144PROD with HEARING
verify their identity every single time we talk with an individual,
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00055 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
50
no exceptions. After identification, we can then provide excellent
customer service, whether that be filing an initial claim or review-
ing an active claim.
Mr. DAVIS. Let me again just thank you and your workforce and
your colleagues for the work that you have done and the faith and
trust that we have in what it is that you do.
Thank you, Mr. Chairman, and I yield back.
Mr. LAHOOD. Thank you, Mr. Davis. I will now recognize one
of our new numbers, Rudy Yakym, of South Bend, Indiana.
Mr. YAKYM. Thank you, Mr. Chairman, and thank you to our
witnesses for being here today. Unemployment insurance improper
payments and fraud ran rampant during the COVID–19 pandemic.
The Government Accountability Office, GAO, estimates that pan-
demic unemployment fraud totaled $135 billion. That is about 15
percent of total UI benefits paid during the pandemic. But the De-
partment of Labor’s Inspector General says that number is at least
$191 billion.
Even worse, outside experts estimate that the total could be up-
wards of $400 billion. California alone accounts for $20 to $33 bil-
lion of fraudulent pandemic UI payments. One estimate put the
state’s improper payment rate at nearly 37 percent during the first
six months of the pandemic. No business could survive allowing for
over one third of payments that are made to be fraudulent. We
should expect more of our government and of our states. We should
expect that fraud—and we know that fraud isn’t just money going
out the door. It is money that undermines the faith that the Amer-
ican people have in the system and the confidence that Congress
has in states to manage federal resources.
Hardworking measures in my district don’t want their taxpayer
dollars going to subsidize California or any other state with such
lax payment controls unless the state implements reforms, up-
grades systems, and demonstrates a commitment to chasing down
fraudsters. Despite these eye-popping fraud numbers, we have only
recovered about $5 billion of it or less than 4 percent. The statute
of limitations to prosecute these cases expires at the end of March.
Congress must extend that deadline so that we can continue
unwinding these criminal rings and hold the fraudsters account-
able.
One of our most important responsibilities as members of Con-
gress is to be good stewards of taxpayer money, because after all,
the only money that we in the federal government have is money
that we take from the American people in the form of taxes. Allow-
ing this level of fraud to occur and not taking every possible step
to recover these funds and these fraudulent payments would be ir-
responsible.
Mr. Chairman, I ask that this email from the DOJ pertaining to
uncharged UI fund matters be entered into the record.
Mr. LAHOOD. Without objection.
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00056 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
51
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 36 here 59658A.036
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00057 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
52
Mr. YAKYM. Thank you.
Mr. Talcove, as of January 28, 2025, the Department of Justice
had 1,648 open cases. These are uncharged criminal matters relat-
ing to COVID–19 fraud. The Department of Labor’s Inspector Gen-
eral has shown approximately 157,000 open UI fraud complaints
assigned to its hotline office. Are you surprised about the sheer
number of unemployment insurance fraud cases our federal law en-
forcement agencies are actively investigating?
Mr. TALCOVE. Thank you so much for the question. I want to
start with I really believe in unemployment insurance. The number
that was lost was approximately $250 billion across the country,
and California was ground zero for it. Unfortunately, because they
paid some of the highest benefits in the country and their then-
Commissioner Julie Su had some of the least amount of safeguards
in place.
I am actually surprised that there are that many open cases, be-
cause I truly believe a lot of the fraud took place and individuals
don’t even know their information was used. As I mentioned in my
testimony, a lot of this happened with criminal groups, both domes-
tic and transnational, who use the stolen PII that went into these
eligibility determination systems that knew how to manipulate
them better than your constituents. And to this day, we were talk-
ing about it before, you had individuals that got a notice from the
State of California, the State of Ohio, saying you know, you got
your benefits, and those people threw those notes away because
they never got benefits. So I am not surprised by that.
But I also want to note that it is not just unemployment insur-
ance. It is the SNAP program. It is the other programs, including
rental assistance. Anywhere where the government is providing a
check, these criminal groups are now working at scale.
Mr. YAKYM. Thank you. And briefly, Mr. Talcove, do you believe
that there is still more unemployment fraud carried over from the
pandemic out there that could result in prosecution or recouping
funds if we were to extend the statute of limitations?
Mr. TALCOVE. Yes, I think there is.
Mr. YAKYM. Thank you. Mr. Chairman, I yield back.
Mr. LAHOOD. Thank you, Mr. Yakym.
Recognize Ms. Chu of California.
Ms. CHU. Well, first let me say that I can’t believe that Repub-
licans are holding a hearing purportedly about going after pan-
demic-related fraud in the unemployment insurance program with-
out addressing the fact that a few days ago President Trump ille-
gally fired the inspector general who is responsible for doing that
very work. Inspector General Larry Turner was a well-respected
non-partisan Senate-confirmed professional. His leadership inves-
tigating UI fraud had already resulted in over 2,000 individuals
charged, more than 1,400 convictions and $1.1 billion in taxpayer
dollars recovered. And IG Turner even testified as a witness for the
Republican majority for the hearing they held on UI fraud back in
2023 during which time he warned that despite the office’s suc-
cesses, insufficient funding from Congress was limiting their inves-
tigative capacity and causing lost opportunities to hold fraudsters
DMwilson on DSK7X7S144PROD with HEARING
accountable. The Republican majority still hasn’t addressed that
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00058 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
53
funding shortfall, and now President Trump has fired the person
responsible for reducing that fraud.
If Republicans want to better combat and prosecute UI fraud, we
need to push back against President Trump’s illegal firing of our
nation’s top UI fraud investigator and get Mr. Turner and other
independent non-partisan inspector generals across government
whom the President illegally removed back on the job.
And then if we have the fraud, who is going to do the work of
actually deterring it? Well, it would be our federal employees. And
yet the Trump administration’s undermining of the federal work-
force goes far beyond inspector generals. It is part of the systematic
attempt to politicize the civil service and make services worse for
everyday Americans who rely on safety net programs like unem-
ployment insurance.
Ms. CHU. Those attacks on our Civil Service include mass emails
to almost all federal employees asking them to resign and then
threatening layoffs if not enough employees comply with this.
It includes the administration’s proposal to politicize the federal
workforce by stripping nonpartisan federal employees of their job
protections to make it easier to fire and replace them with Trump
loyalists.
And it includes putting tens of thousands of employees on admin-
istrative leave without cause.
We have career civil servants for a reason. They are professionals
with expertise who are essential to the successful operation of fed-
eral programs and benefits for the American people.
And that includes the staff responsible for investigating UI
fraud.
In fact, Inspector General Turner led a team of over 300 federal
employees, including criminal investigators, auditors, attorneys,
and other subject matter experts dedicated to combatting waste
and fraud in all of the Department of Labor’s programs including
UI.
The Trump administration’s actions put us at risk of losing this
expertise, and it is jeopardizing our able to successfully continue
going after this fraud.
I am also concerned that the Trump administration’s threats to
fire federal employees will lead to further outsourcing of core gov-
ernment responsibilities.
We saw during the pandemic what happened when States
outsourced their UI work to untrained contractors, and that, in
some cases, actually caused waste and fraud in the program by giv-
ing employers incorrect information, resulting in overpayments, or
by exposing workers’ sensitive information to fraud rings.
Now, Mr. Meyenburg, you testified about the risks of outsourcing
during the pandemic. Can you expand on that and why investing
in an experienced government workforce leads to better outcomes
than outsourcing to contractors?
Mr. MEYENBURG. Yes, I believe it comes down to two different
things—it is training and the mission. With dedicated staff that
have dedicated time for implementing robust training programs,
this offers the ability to highlight those safeguards and make sure
DMwilson on DSK7X7S144PROD with HEARING
that they are utilized in the proper way.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00059 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
54
Ms. CHU. And could you have more waste and fraud happening
with the contractors?
Mr. MEYENBURG. Potentially. I would say potentially.
Ms. CHU. Yes. Thank you. I yield back.
Mr. LAHOOD. Thank you.
Pursuant to committee practice, we will now move to 2-to-1 ques-
tioning. I will recognize a new member of the Committee on Ways
and Means, Max Miller of Ohio.
Mr. MILLER. Thank you, Chairman LaHood and Ranking Mem-
ber Davis, and excuse my voice. Thank you for the opportunity to
hold this important hearing.
We must make every effort to equip and empower Americans to
reenter the workforce and unlock the full potential of our Nation’s
economy.
To achieve that, it is imperative that we safeguard the integrity
of our employment safety net. Since coming to Congress, I have
been a strong proponent of building our Nation’s future workforce
by providing individuals with opportunities to acquire qualifying
work skills, and keep the United States at the forefront of innova-
tion and productivity.
Like many, I am very concerned this view I have heard from a
lot of our colleagues on this side of aisle on the unprecedented
fraud that occurred during the pandemic, which the GAO has esti-
mated, which we have heard a lot today, that anywhere between
$100 billion to $135 billion and possibly more.
Just in northeast Ohio alone, where I am from, the United States
Attorney for the Northern District of the State sentenced perpetra-
tors who stole millions of dollars from the program intended to as-
sist the unemployed, which was all over our area.
This commitment to prosecute and to hold criminals responsible
demonstrates that we must continue to be vigilant of those who try
to scam federal leave programs and waste our tax dollars, includ-
ing providing federal investigators with the continued authority to
prosecute those stealing from American workers.
It is my understanding that 2,000 individuals have been pros-
ecuted with $47 billion—I will say it again—$47 billion in potential
fraud to date. But there are at least 157,000 open cases and much
more to be done that are unaccounted for at this moment in time
to date.
Fortunately, efforts such as those undertaken by my home State
of Ohio and others will help their respective States’ unemployment
system stop unemployment insurance fraud before it starts and get
resources to eligible workers in a timely and accurate fashion. And
I believe that is what everyone would like regardless of political af-
filiation.
Mr. Ficke, as you testified, the State of Ohio was experiencing
a high volume of fraudulent claims. In fact, the unadjudicated
claims backlog was growing exponentially, and as you know, Ohio’s
governor made a decision to engage the private sector for support,
including the Ohio Business Roundtable’s members’ expertise that
you had mentioned earlier, with a goal to stop fraudulent claims,
reduce the backlog, and reengineer the customer experience. I un-
DMwilson on DSK7X7S144PROD with HEARING
derstand the project’s results exceeded expectations.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00060 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
55
How can such public and private partnerships be effective in re-
ducing fraud, safeguarding public resources, and allowing funds to
be targeted to those who are truly in need?
Mr. FICKE. Thank you for the question. You know, in Ohio’s
case, I think that some of the key factors involved is collaboration
across agencies, across state and federal resources, especially when
it comes to, as an example, the prosecution of those cases.
If you look at the amount of work that Ohio Department of Jobs
and Family Services did, they focused a lot on advanced analytics,
taking advantage of Big Data technology programs to really seg-
ment off the claims that actually were fraud-free, so that we could
actually get to the point of real citizens in need were getting paid.
And as we—and the other thing I think that the State did an ex-
cellent job at is, the claims that were submitted that were actu-
ally—had significant amount of fraud indicators on them, were all
processed, and they were all ultimately looked at and freed.
In the long run, I think the other thing that was really important
was taking all that advanced analytics and data and actually pro-
viding it to the law enforcement sides to actually enable the actual
prosecution with good data and with things that go with it.
I think it is very important, and it is a core part of my testimony,
is the collaboration between the financial services industry and the
unemployment agencies.
There is lots of really important analytics work that has been
done in both of those worlds that actually required the—and can
provide a collaborative effort to go between those.
The work that NASWA has done around the Integrity Center, I
think, is very important, and Lieutenant Governor Husted’s focus
on advanced analytics for the State of Ohio clearly put Ohio in a
very good position coming into this at a time when in Ohio’s case,
they had to stand up a brand-new system for the pandemic unem-
ployment assistance programs that went with it.
So collaboration, advanced analytics, and really working with
some of the key private sector organizations to enable that, I think,
is critical. Thank you.
Mr. MILLER. Thank you, Mr. Ficke, and I just want to thank
you again for all the work you do in my home state, in our home
state. It is very much needed, and just thank you again from an
Ohioan to another Ohioan.
Mr. Chairman, I yield back.
Mr. LAHOOD. Thank you, Mr. Miller.
I now recognize Mr. Bean of northern Florida. Welcome.
Mr. BEAN. Thank you very much, Mr. Chairman. Good after-
noon to you, and good afternoon to you Work and Welfare Com-
mittee family. I am one of the new guys. It is an honor to be here.
I was sent to Congress. I believe one of the reasons that north-
east Florida sent me to Congress was, I want to go after spending.
I think we have an out-of-control government that just spends far
more money than it has.
And so I am a man on a mission, a man on a mission, to fight
fraud, abuse, waste, and to get spending under control.
So, Mr. Chairman, I want to thank you for your draft selection
in allowing me to serve.
DMwilson on DSK7X7S144PROD with HEARING
Ranking Member Davis, it is an honor to be with you as well.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00061 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
56
My first question—well, first of all, Mr. Talcove, I appreciate you.
You have actually mentioned, anywhere government is giving away
checks, you will find fraud, and, indeed, we did that.
I come from the Small Business Committee, where we did the
PPP program and the EIDL loan program, and we have reports
that 23 percent—over 1 in 5 loans that we made back then are
pure fraud, not somebody making a mistake on an application, not
somebody checking the wrong box, but fraudsters that had the sole
intent of stealing our money.
We actually had an administrator come before us with the Biden
administration and said, you know, it might be too much, maybe
we just need to all let it go.
I say no, the American people say no, and so we want our money
back. I actually filed the bill ‘‘We Want Our Money Back’’ to not
let anything go. We want all of our money back.
We heard from fraudsters that used Barbie dolls to take a pic-
ture. We had a program, a FinTech that administered the program
that would take a picture of you just to make sure you are an indi-
vidual person, and the program fraudsters could take a Barbie doll
and stick it in front of a webcam and the program said approved,
you are approved for a loan.
So we called it Swindler Barbie. A new Barbie is in town, Swin-
dler Barbie. Ken got in on it too by the way, of people stealing
money.
So the first question goes to you, Mr. Chairman. Where are we
on the statute of limitations? How can we make sure that we don’t
let it go, that we want our money back, and we are going after
fraudsters? Where does that stand? Who is running it? Who is in
the lead? What is going on?
Mr. LAHOOD. Well, thanks for the question, Congressman Bean.
So as was alluded to by the witnesses and a number of us today,
we are coming up on the March 26th date where the statute of lim-
itations will expire. So we have legislation that has been intro-
duced that will be marked up to extend that statute of limitations,
so we can go after the fraudsters and get to the criminal elements
of this and make sure that we get that money recouped for tax-
payers.
Mr. BEAN. Amen, amen, we are on schedule, we are on flight.
It is a very tricky thing.
So you and Mr. Davis last year did a program that is called the
Reemployment Services and Eligibility Assessment, the RESEA,
which really was to help prevent fraud and designate support to
those who need it.
Does anybody know about that?
Mr. Talcove, are you aware of that? Did that program work, did
it work with the intent of delivering help to people that needed it
but not the fraudsters? Good program?
Mr. TALCOVE. Unfortunately, I am not aware of that program.
Mr. BEAN. Ms. Hui.
Ms. HUI. Yeah, so that program really allows for local workforce
boards and other professionals who are working with individuals
who are currently getting unemployment benefits to really——
Mr. BEAN. Did it prevent fraud or help fraud? Did it help or
DMwilson on DSK7X7S144PROD with HEARING
not?
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00062 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
57
Ms. HUI. I think it does help with fraud because you actually
have to show up in person or virtually to actually do an employ-
ment about workforce development. So there is that verification
and engagement, and we feel that those more personalized service
will result in better workforce outcomes, more sustained employ-
ment for those individuals.
Mr. BEAN. Great.
Ms. HUI. So there is that that individual touch to that. So if
someone is getting that benefit, they are also then required to ei-
ther report in person or do the virtual visit.
Mr. BEAN. So it has given some benefits.
Mr. Talcove, I know we got time. Everything is in a hurry here.
We got to boogie.
What do we need to do? I helped launch a DOGE. I think some
of us up here are part of the DOGE caucus, to say, we have got
to—enough, enough with the stealing of our money, enough with
the fraud, waste, and abuse.
I think American taxpayers are celebrating some of the early
wins that we have discovered, fraud and abuse.
Where should we start? Where should this committee start to say
enough with the waste, fraud, and abuse?
Mr. TALCOVE. It is three things. It is front-end identity
verification, it is no more self-reported information, and it is man-
aging the back-end to beneficiaries.
Mr. BEAN. Three small hurdles. It doesn’t sound like it is that
hard. It shouldn’t be that——
Mr. TALCOVE. The private sector does it every day. Their fraud
rate is 3 percent. The public sector is 20 percent.
Mr. BEAN. Thank you. Thank you very much.
Witnesses, thank you so much.
Mr. Chairman, I yield back.
Mr. LAHOOD. Thank you. I will now recognize Ms. Moore of Wis-
consin.
Ms. MOORE. Thank you so much, Mr. Chairman, and I want to
thank our ranking member and all of our witnesses for being here
today.
I did have a conflict in my schedule, so I was unable to be here
an hour ago, but I did have an opportunity to review your testi-
mony, and I appreciate your appearance here today.
I want to welcome particularly Mr. Talcove to the Ways and
Means Committee. Are you a member? Is he a member of the Ways
and Means Committee now.
I am talking about my new colleague here.
Mr. LAHOOD. Oh, Mr. Bean?
Ms. MOORE. Mr. Bean.
Mr. BEAN. Hey there.
Ms. MOORE. Hi. Welcome to the Ways and Means Committee.
Your enthusiasm, of course, is very welcome. And I am learning
now about the DOGE caucus and your efforts to reduce waste,
abuse, and fraud.
So I guess what I am concerned about, Mr. Talcove, is, if we are
indeed going to combat fraud and waste, how does firing the In-
DMwilson on DSK7X7S144PROD with HEARING
spector General of the Department of Labor contributing to this?
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00063 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
58
I mean, this is a person who successfully prosecuted 1,400 cases,
and, of course everybody on the committee would like to see fraud
reduced. So how can we expect to do that without an Inspector
General on board?
Mr. TALCOVE. If you go back to—and hopefully you read my
opening statement—I think the biggest challenge we have is, we
don’t want to pay and chase. What we want to do is, we want to
prevent this at the front end. We want to use——
Ms. MOORE. Okay. Okay. Thank you for that. I don’t have a lot
of time. So, your notion is that this DOGE caucus and Mr. Musk,
the billionaire, going in, is an effective strategy for start—we don’t
know exactly what he is doing. And I checked with the Speaker of
the House. He also has no idea what they are doing.
So, what information do you have to provide the subcommittee
to demonstrate that this is indeed a better strategy than having an
Inspector General on the back end? What are they doing that is
making them more effective?
Mr. TALCOVE. I have nothing to do with the DOGE. I don’t
know what they are doing.
Ms. MOORE. So, you don’t know what they are doing?
Mr. TALCOVE. No, ma’am.
Ms. MOORE. Okay. But somehow you feel like the inspectors
general is not a good strategy. Okay.
Mr. Talcove, you also recommended eliminating broad-based cat-
egorical eligibility. You know, just like an infant born at 1 pound,
2 ounces, for example, is categorically eligible for Medicaid because
they are disabled. Their mother might also be eligible for WIC or
for SNAP.
Why do you think disconnecting and making it inconvenient for
them would be helpful, particularly since our having disconnected
these benefits has cost $2.3 billion in administrative expenses over
5 years?
Mr. TALCOVE. So during the pandemic, I saw over a trillion dol-
lars of taxpayer money get stolen, and unfortunately, by having
broad-based eligibility determination in place, the criminals were
stealing at scale, and they were impacting legitimate individuals
that live in Wisconsin, that live in Illinois. It created a huge oppor-
tunity for them to exploit the system.
Ms. MOORE. So, you just punish the eligible people, like the 99
percent who are eligible, having them run all over the place? You
got your 1 pound, 2 ounce baby, and you got to go to five offices
to get your benefit so that you can—okay, I get it.
Mr. Meyenburg, we are talking about accountability a lot. Can
you explain to me how an unelected, unaccountable billionaire who
has accessed this personal information with, I guess, microwave se-
curity clearances for his team, how is—and, you know, sticking
thumb drives in the sensitive information—how is this appro-
priate?
Mr. MEYENBURG. I honestly have no idea. I am not even al-
lowed to stick a thumb drive into my own computer to copy any
data over. So I don’t know why they would have access to that.
Ms. MOORE. Mr. Chairman, my time is winding down, but I do
DMwilson on DSK7X7S144PROD with HEARING
appreciate your hearing from me.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00064 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
59
Mr. Ranking Member, I thank you for your leadership as well,
and I thank the witnesses, and I yield back.
Mr. LAHOOD. Thank you, Ms. Moore.
I will now recognize Nathaniel Moran, a new member of the
Ways and Means Committee, a new member of the subcommittee,
from east Texas. Welcome.
Mr. MORAN. Thank you, Mr. Chairman. I look forward to being
part of the subcommittee and the full Ways and Means Committee
this next session.
I have got a number of questions based on the testimony that
has been given here today. I wanted to, and I am prepared to, talk
about foreign adversaries and their role in the unemployment in-
surance fraud issue, but let me start with this.
Mr. Talcove, I think you said this earlier. Your quote was, ‘‘It is
the same groups running the same playbook, stealing at scale.’’
And you even gave some examples of after certain disasters and
you said, ‘‘We need to use data and analytics to effectively prevent
some of this.’’
I want you to go back though because your three recommenda-
tions were: apply ID verification at the front end, end self-certifi-
cation, and continuously authenticate beneficiaries.
And I love that because it really is front-end oriented, but be
more specific when you talk about applying ID verification. I mean,
how onerous would this be, or what kind of verification are we talk-
ing about, to be able to make sure that before the money goes out—
because I agree with you and I will come back around to this in
a second. Once it goes out, it is so hard to get back. So we need
to make sure that every dollar that goes out is the appropriate dol-
lar. How do we just do some simply ID verification on the front
end?
Mr. TALCOVE. It happens every single day. Every single one of
you goes through that identity-verification process when you go to
your bank, when you use Amazon, when you go online to do e-com-
merce.
And the great thing about the technology today is, you don’t even
know it is happening, right? Think about it. You are at the gas sta-
tion, you put your credit card in, and all of a sudden you get a text
on your phone, and it says, Congressman, are you really in Wash-
ington, D.C.?
So that technology is used in the private sector every single day.
One of my frustrations is, government seems to use this thing
called NIST 863–2, I think. It was created in 2017. It is com-
plicated. It is hard. Nobody in the private sector uses it.
So the technology is out there every single day, and we all use
it. It is just different in government.
Mr. MORAN. And you are making the exact point that I was
hoping would be brought out here, that it is easy. It is not that dif-
ficult. In fact, today I got one of those texts from my bank, asking
me if a particular charge, an $85 charge, was, in fact, me using
that charge. All I had to do was respond yes, and we are good to
go.
So I think there is an easier way, a more effective way for us to
DMwilson on DSK7X7S144PROD with HEARING
stop the fraud on the front end, and certainly it is going to benefit
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00065 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
60
us on the back end because we have got a number of those cases
that are out there, that we need to prosecute.
But I am a little bit concerned, I will just tell you, about the re-
turn on investment, the cost-benefit analysis of doing that.
What are the size of the claims, and I will give this to all three
of the witnesses—Ms. Hui, Mr. Ficke, and Mr. Talcove—what is
the average size of the claim that we are dealing with once we ex-
tend this statute of limitations if we are able to do that? And what
is the cost for actually moving forward to prosecute those claims?
Mr. TALCOVE. So what I would say is, I wouldn’t look at the
average size of the claims. I would look at the criminal groups.
Some of the groups, the China group, APT41, Scattered Canary,
you are talking literally hundreds of millions of dollars, but you
need sophisticated law enforcement at the federal level, agencies
like the Secret Service, who have been outstanding in this area.
So it is worth it, but you have to get to these large fraud rings,
primarily located overseas.
Mr. MORAN. Yeah, I have got a financial crimes investigation
center for the State of Texas located in my hometown of Tyler, and
they chase after these groups that do this, and it is, it is the same
groups moving about, but using the same technologies and the
same methodology.
Ms. Hui, you were talking about the stealing of personal identi-
fication information on the front end which gives them the gateway
to steal and to create fraud. How are they doing that? How are
they obtaining the personal identification information of American
citizens?
Ms. HUI. They just buy it off the dark web. I mean, with all
these different data breaches that have happened, it is really kind
of open season on the dark web and purchasing legitimate person-
ally identifiable information, and therefore, you know, you can—at
least in Missouri, you can get in perhaps and file a claim, but we
do have flags within the application that then clue us into there
is something not quite right, right?
And the partnerships, both between government agencies and
private sector, whether it is a vendor like Mr. Talcove’s or associa-
tion like Mr. Ficke’s, it is really important that all the partnerships
across the board work together and understand what may be some
limitations but also challenges and opportunities.
I think the biggest thing for us to realize, though, is that it is
not a one-and-done situation, like, this, if you don’t accept that up-
date on your operating system, it is a paper weight, an expensive
paper weight, right.
So we have to adopt that mentality when it comes to protecting
taxpayer dollars that are invested, whether it is a UI trust fund
or any other beneficiary fund. We want to make sure the eligible
people are getting the benefit.
Mr. MORAN. Yeah, I agree.
And, Mr. Chairman, I see my time is over. I didn’t even get to
my foreign adversary questions. I am part the China Select Com-
mittee, and I will tell you, it is really concerning to me that China
is at the forefront of this, of stealing our personal information and
DMwilson on DSK7X7S144PROD with HEARING
then being part of obtaining these dollars from American tax-
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00066 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
61
payers, using it against us. It is a national security issue in my
opinion.
Mr. Chairman, I yield back.
Mr. LAHOOD. Thank you, Mr. Moran.
I recognize Mr. Evans of Pennsylvania.
Mr. EVANS. Thank you, Mr. Chairman and Ranking Member
Davis. Today I want to discuss improving our unemployment insur-
ance for the betterment.
Unemployment insurance is a critical benefit for American work-
ers. During the pandemic, unemployment insurance was a lifeline
for Pennsylvanians in getting fast emergency assistance.
I support increasing the funding for the State unemployment op-
erations so that the workers can get more resources. They need
help.
I specifically want to discuss the important work that merit-
based staff do the U.S. The best way that we can fight and prevent
unemployment insurance fraud is to hire well-trained merit-based
staff.
We know that certain States during the pandemic hired un-
trained contractors in staff roles which only led directly to more
fraud in errors in the system. It is interesting that the Musk ad-
ministration is trying to do the same thing right now, inside cer-
tain federal agencies, replacing employees with their own outside
contractors.
Right now, the last thing we need is someone unqualified scoop-
ing our constituents’ private data, including our unemployment
system.
Mr. Meyenburg, I would like to ask you a question. In your testi-
mony, you highlighted the importance of merit-based staffing in the
UI system as opposed to States who are outsourcing work through
untrained contractors.
Mr. MEYENBURG. Yes. I believe that merit staff UI workers are
key and ideal for helping prevent fraud because there is no, like,
third-party system. It is, you know, State workers performing the
work of the State and making sure that it stays within the State.
It is not a third-party by any means.
Mr. EVANS. Can you speak more about experience under merit-
based systems and the advantage it has in preventing fraud.
Mr. MEYENBURG. Yes. When you, say, are a trainer, training
folks that are unfamiliar with the system, after years of experience,
you understand the complexities within the system and how to get
from A to B to C in a timelier fashion.
This allows you to conduct the training at a faster level but still
maintain that high level of training that is required in order to do
the position.
Mr. EVANS. Can you please explain the level of job training that
State worker agencies, employees, go through to provide the highly
qualified servicing of the UI system and how this training differs
from non-merit staffing training?
Mr. MEYENBURG. I will say, during the pandemic, I received
a minimal amount of training. It was enough to allow me to proc-
DMwilson on DSK7X7S144PROD with HEARING
ess claims.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00067 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
62
Now, with regular merit-based staff, they receive, at a minimum,
6 to 8 weeks of training, so that way, they are sufficient when they
hit the floor and talk with claimants on the phones.
Mr. EVANS. I want to, one, thank the chairman and thank the
ranking member for the conduct leaders here.
Mr. LAHOOD. Thank you. Appreciate it, Mr. Evans.
Now, I will turn to Ms. Van Duyne who is a new member of our
subcommittee. Welcome, Ms. Van Duyne, and you are recognized.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
It is egregious and actually disheartening that in the wake of a
global pandemic that disrupted the lives of millions—we all saw
it—that forced thousands of small businesses to close their doors
and robbed millions of Americans of their loved ones, bad actors
and international criminal gangs that would seek to take advan-
tage of good-faith efforts to help those negatively impacted by a
once-in-a-lifetime tragedy.
The GAO estimates that pandemic unemployment fraud may be
as much as $135 billion, with some estimates even higher.
And I think it is vital that Congress act so that prosecutors have
the opportunity to track down and to hold these criminals account-
able.
But this committee also has a responsibility to ensure proper
oversight in the administration of the UI program as a whole.
Mr. Talcove, government officials, state employees, and contrac-
tors routinely participate in insider UI fraud, and states either ig-
nore the problem, or they try to infer that embezzlement is not an
issue with state employees.
This problem is often overlooked by government officials as in
Delaware, for example, where the Public Integrity Commission re-
fused to investigate a Delaware Department of Labor employee
who was embezzling money directly from the state’s Unemploy-
ment Trust Fund.
Can you please speak about your experience regarding insider UI
fraud, and is it being taken seriously by government officials?
Mr. TALCOVE. Yeah. I would say, of the $250 billion that was
stolen from unemployment insurance, I would say approximately
10 percent, or $25 billion, was insiders.
Ms. VAN DUYNE. Wow.
Mr. TALCOVE. And what the insiders were doing was, they
were, in some cases, selling their access to some of these same
criminal groups that you mentioned, from China, Russia, Nigeria,
and Romania, they were selling their access to gangs, or—which I
think is worse—is, they were stealing from the very people that
they were trying to serve.
And you have to have oversight, and you have to have auditing
in those programs. And it wasn’t just in Delaware. I mean, I think
it happened in 20-plus States.
The other point that I would make is, unfortunately, it is still
happening today, and it is just not in the unemployment insurance
program. It is in the SNAP program, it is in virtually all the pro-
grams across the country.
Now, last point, 99.9 percent of those workers, they are really
good people. They show up every day and they do the right thing.
DMwilson on DSK7X7S144PROD with HEARING
It is a very small percent, but they give everybody a bad name.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00068 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
63
Ms. VAN DUYNE. And I appreciate that. I am also with Aaron
Bean on the Small Business Committee, and this is my fifth year
on that committee. And we have talked to small businesses who
during this time have seen, you know, benefits that they should
have received, not delivered, because that was given out to
fraudsters and criminals, and the complete lack, during the last ad-
ministration, of holding these people accountable or providing over-
sight.
Ms. Hui, in your written testimony, you quoted a national study
published in August of 2020, by the University of Chicago, entitled
‘‘U.S. Unemployment Insurance Replacement Rates During the
Pandemic.’’
You say that the median percentage of salary replacement unem-
ployment during the pandemic was 145 percent. It was more than
200 percent for workers in the bottom 20 percent of the U.S. in-
come spectrum and more than 300 percent for workers in the bot-
tom 10 percent.
This compares to the typical pre-CARES Act salary replacement
rate of only 40 to 50 percent of lost income.
In plain English, we are paying a lot of money to stay home rath-
er than to go to work, and the disaster effects of this policy are still
being felt today.
And according to the U.S. Chamber of Commerce, workforce pop-
ulation remains below pre-pandemic levels, and we are missing 1.7
million Americans from the workforce, compared to February of
2020.
Can you please speak on the disastrous effects of paying people
unemployment benefits that were double or triple their salary be-
fore the COVID–19 pandemic and why this must never happen
again during any type of economic downtown in the future?
Ms. HUI. Certainly, you know, the American people are so gen-
erous in making sure that their fellow Americans get support dur-
ing these times of emergencies, right? And so I think one of the
things that we saw that was a major motivation for this type of
fraud was the federal pandemic unemployment compensation plus-
up.
So most states have a regular weekly benefit amount. In Mis-
souri, the maximum benefit that you can get is $320 a week, and,
again, that is based on what your income was and what your cred-
its are into the trust fund from the employers that have paid in.
Now, when you then add $600 on top of that, you are definitely
putting a huge multiplier on it, right? And during the 2008/2009
crisis, that plus-up actually was $25.
So you would have your weekly benefit at the state level and
then a $25 plus-up. But in 2020 we raised it to $600.
And we needed a flat number. There were a lot of states that had
legacy systems, and they could replace that $25 number with an-
other flat number. But they couldn’t prorate it.
So that was one thing, but the choice of $600 absolutely was,
like, the spark that really generated the attention of fraudsters to
get in. You just had to have some successful hits to—in each state,
you could have multiple states that you file in, just a few weeks,
and you can get, you know, quite a few thousands of dollars. So,
DMwilson on DSK7X7S144PROD with HEARING
again——
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00069 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
64
Ms. VAN DUYNE. My time is expired. I appreciate your answer.
Ms. HUI. No problem.
Ms. VAN DUYNE. I need to yield back, but thank you all very
much for your testimony.
Mr. LAHOOD. Thank you, Ms. Van Duyne.
I now recognize Mr. Gomez of California.
Mr. GOMEZ. Thank you, Mr. Chairman. Congratulations on
being the new chairman of this committee.
Let me be clear. Democrats and Republicans both say that there
is no place for fraud. Democrats, it is because it undermines peo-
ple’s faith that government is actually doing the job that they are
supposed to do. And I think that is a big deal.
And also, I appreciate the gentleman from Florida mentioning
that there was fraud in a Republican-run State, and it is not just
the Democratic states have the problem.
And also, one of the biggest ways that fraud happens is through
weak security measures that leave people’s personal information
vulnerable.
Mr. Meyenburg, what kind of training do State worker agency
employees receive to ensure they are protecting personal informa-
tion?
Mr. MEYENBURG. Yes. It is at least 6 to 8 weeks’ worth of
training with a heavy emphasis on protecting identity information
and all personally identifiable information.
Mr. GOMEZ. Social Security numbers, birthdays——
Mr. MEYENBURG. Yes.
Mr. GOMEZ [continuing]. Accounts, anything that can say this
person is associated with this—or this information is associated
with that individual?
Mr. MEYENBURG. Absolutely.
Mr. GOMEZ. Yeah. And that is—you know, I want a bureaucrat
to be just a pain in the ass. I want them to, like, Oh, u don’t have
the proper information? You know, reject it.
Oh, you want to access this information? You need this form. You
need this clearance. You need this kind of training. You don’t? Too
bad. You can’t have it.
But something that is going on now at the Federal level is when
it comes to Secretary Bessent and President Trump. I don’t think
Secretary or President—or President Trump made sure Elon Musk
got that kind of training, or any training for that matter before all
of our personal data was turned over to him.
I want my friends on the other side of the aisle to see this as
a big, big issue, because if there is nothing there being a check,
this is becoming the largest fraud and scam of our government
when it comes to personal information in our history.
This is at a time when people are struggling with skyrocketing
rent, when grocery prices are through the roof, and when childcare
costs are out of control.
What are Donald Trump and Secretary Bessent doing? They gave
Elon Musk, an unelected, unconfirmed, untrained, special, quote/
unquote, special government employee, and the rest of his tech
bros, access to every Americans’ sensitive and personal financial in-
DMwilson on DSK7X7S144PROD with HEARING
formation.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00070 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
65
They have access to our bank accounts, to your bank accounts.
If you filed taxes electronically, you paid your taxes, you received
payments, they have access to all your accounts. You know, we
need to do something to address that.
And it doesn’t matter where this—like, they have access to
everybody’s information, if you live in Indiana, Illinois, Ohio, Cali-
fornia, and that is risking a massive personal data leak that can
lead to identity theft on an unprecedented scale.
I had my identity stolen so I know how painful it is to have to
prove who you are and to get your money back and to make sure
that you are not going into debt.
Improper disclosure of taxpayer information is considered a fel-
ony under section 6103, punishable up to 5 years in prison, as well
as $5,000 fine, and that is just for one instance of improper tax dis-
closure.
What is the punishment for every single American? That is the
scale of this potential fraud and breach of information.
Is Secretary Bessent’s careless disregard for most sensitive per-
sonal information worthy of Articles of Impeachment? I don’t know
yet because they refuse to hand over any information of what oc-
curred in the last several days.
But this is a serious, unprecedented situation. Secretary Bessent
needs to come before this committee and answer questions on vio-
lating the people’s trust but also when it comes to their personal
information.
We can’t stand for it. Fraud is fraud, no matter who does it. Is
it a public employee? Is it a criminal enterprise? Or even if it is
the Secretary of the Treasury himself, we need to stop it, and we
need the answers now.
With that, I yield back.
Mr. LAHOOD. Thank you, Mr. Gomez.
I now recognize the gentleman from northwest Iowa, Mr.
Feenstra.
Mr. FEENSTRA. Thank you, Chairman, and I want to thank the
witnesses for being here. I enjoyed reading your testimony and also
listening to it.
I just want to remind everybody that all bureaucrats are not
elected. This is just common sense.
We are here to create solutions. We are here to understand the
problems and then create solutions, and, Mr. Ficke, that is what
I want to talk about.
I was impressed by reading your testimony. I know you are not
a law enforcement officer, but you have 30 years of experience in
the financial services industry. And generally unemployment insur-
ance is prosecuted using federal banking laws, including mail
fraud, wire fraud, conspiracy, aggravated identity—identity theft,
money laundering.
So considering your time in financial services and working with
the State of Ohio, are these banking offenses the right charges for
individuals with unemployment insurance fraud? What is your
thoughts there?
Mr. FICKE. Well, first of all, thank you for your question. You
know, in my previous testimony, I have actually stated a few times
DMwilson on DSK7X7S144PROD with HEARING
that I think it is very important to look at collaboration of data and
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00071 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
66
information between—between what is available in the private sec-
tor and what is available in the benefits applications and submis-
sions and those types of things that are going with it.
I think the prosecution of those criminals is extremely important.
We have talked about the number of cases. I think it is really im-
portant to focus on the magnitude of individual cases and looking
at the impact that those can have on the overall collection and re-
covery of those funds.
Mr. FEENSTRA. Do you think we should figure out better ways,
though? Instead of using the, you know, the financial services in-
dustry, is there a better way to prosecute these claims under some-
thing different than banking regulations?
Mr. FICKE. Well, I think in my experience, especially with the
Attorney General’s offices and the collaboration that happened in
Ohio, a lot of it was driven and supported by the amount of infor-
mation-sharing that happened between.
And as Mr. Talcove has pointed out a few times, this is not lim-
ited to unemployment insurance. This goes across SNAP and mul-
tiple other programs.
I think it is important, when we looked at the guidelines from
a private supporter of our State, when we looked at the guidelines,
what we were able to do, it was our role, as the agency’s role to
actually identify——
Mr. FEENSTRA. Yep.
Mr. FICKE [continuing]. That a case had to be prosecuted but
then to turn that over to the appropriate organizations at that
time.
Mr. FEENSTRA. So you are in the State of Ohio. I was in the
State of Iowa. I was a state senator, head chair of Ways and Means
at that point. And really the states are the ones that handle all the
unemployment insurance issues, and here is the situation.
Obviously, through COVID we gave a lot of dollars and stuff like
that. How can us, as the states, what can the federal government
do to help the states with fraud issues?
And then I think moving forward and saying, all right, what hap-
pens if we have a situation like this again? How can we be
proactive in trying to find solutions to mitigate some of these
issues?
Mr. FICKE. Well, thank you for the question. I think the first
thing that comes to mind for me is sustainability. There have been
very strong measures put in place during the crisis. The support
to actually encourage and enable the states to actually keep those
in place, I think, are going to be a really important part in the
overall success.
Another one is—and I say this a few times—is collaboration, not
only from a data perspective but best practices that have taken
place in multiple private sector organizations.
Mr. FEENSTRA. And using each state. So Ohio might have a
great way of doing it. I mean, we should be collaborative across
State lines, figuring out what are the best practices.
Mr. FICKE. Yeah. A very good example of that is the reality that
one false account in a financial institution could be used across
multiple states——
DMwilson on DSK7X7S144PROD with HEARING
Mr. FEENSTRA. Yeah.
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00072 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
67
Mr. FICKE [continuing]. And today the individual state has a
harder time recognizing some of those trends.
Mr. FEENSTRA. Mr. Talcove, can you talk about that a little bit,
making sure that, moving forward, our state systems are prepared
for these unemployment spikes, and, you know, this stealing of bil-
lions of dollars, and what the States can do collaboratively with the
federal government?
Mr. TALCOVE. Yeah. So I mean, I want to make the first point.
I was out in California this week, L.A., and the same criminal
groups——
Mr. FEENSTRA. I heard that, yes.
Mr. TALCOVE [continuing]. That stole from the unemployment
insurance——
Mr. FEENSTRA. Are doing the same thing with fire.
Mr. TALCOVE [continuing]. Are now stealing from the disaster
unemployment——
Mr. FEENSTRA. So that should be a clue to us, right?
Mr. TALCOVE. Right. We haven’t fixed it——
Mr. FEENSTRA. Yes.
Mr. TALCOVE [continuing]. Right? And it really starts with
those three things that I talked about, right? It is the front-end
identity verification——
Mr. FEENSTRA. Yep.
Mr. TALCOVE [continuing]. It is no self-reporting, and it is man-
aging that back-end population. And it is frustrating because there
are people in California who need those benefits that are going to
wake up one day——
Mr. FEENSTRA. And not have them, yep.
Mr. TALCOVE [continuing]. And they are going to see that some-
one put a loan against their house because they got an SBA loan
for a half a million dollars.
Mr. FEENSTRA. Great point. My time is up, but thank you. We
are in this together. As states and as the federal government, we
are in this together to try to figure out solutions.
Thank you, Chairman. I yield back.
Mr. LAHOOD. Thank you, Mr. Feenstra.
I recognize Mr. Horsford of Nevada.
Mr. HORSFORD. Thank you, Chairman LaHood and to Ranking
Member Davis for holding this hearing and for the courtesy of al-
lowing Members to wave on.
I would also like to just talk about the importance, as we are,
about rooting out waste, fraud, and abuse, and protecting American
taxpayers, but also, we really need to provide some answers to our
constituents based on the immediate issue that they are facing.
The largest illegal data breach is happening right now in U.S.
history, at this administration’s direction, and we still don’t know
who is in charge or what they are up to, where this information
is being used or how widespread it is.
So, I really wish that this was the focus of today’s hearing since
this is what the majority of my constituents are calling me about
today.
I would also like to talk about what we are doing to prevent Elon
DMwilson on DSK7X7S144PROD with HEARING
Musk, and the hackers who are involved with potentially slowing
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00073 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
68
down people’s tax refunds, their Federal payments, and their hard-
earned benefits. That is what people want to know.
Less than a year ago, Chairman Smith introduced legislation
meant to increase the maximum penalty for the unauthorized dis-
closure of returns and return information, and I agree with Chair-
man Smith when he stated that Congress must not tolerate the
theft and leak of taxpayer information.
So why aren’t we doing something about it, since we have the
largest illegal data breach in U.S. history taking place right now
under this administration’s watch?
Now, turning back to the issue of this hearing, I actually intro-
duced, back in August of 2022, the GUARD Act, the Guaranteeing
Unemployment Assistance and Reducing Deception Act.
My bill enables aggressive action to recover pandemic unemploy-
ment benefits that were paid to criminal cartels by supporting
prosecution of ring leaders and helping victims of fraud.
The bill would also seek to provide workers who were victims of
identity theft with help to quickly resolve any remaining issues.
My district has no shortage of identity theft cases. That is why
I am concerned with this illegal data breach that is happening
right now.
But between 2020 and 2023, we saw a 63 percent increase in the
Metro Las Vegas area alone of identity theft cases. I know this
issue because my constituents know this issue.
So, I was pleased to see that we would be addressing a rec-
ommendation by the Department of Labor Inspector General to ex-
tend the statute of limitations for pandemic unemployment insur-
ance fraud.
Unfortunately, last week, President Trump fired that IG, the one
who made the recommendation that we are all discussing in this
hearing, the one who makes this hearing relevant.
So, now the IG is gone, the majority is holding this hearing any-
way with two contractors, but not one single public employee who
investigates and prosecutes fraud.
My constituents want to know what we are doing about these
issues, Mr. Chairman. So I suggest that as a committee, we focus
on those priorities and to make sure that they are being addressed.
If I could go to the witness, the minority witness, to understand,
would providing measures like the Guaranteeing Unemployment
Assistance and Reducing Deception Act, the GUARD Act, help ad-
dress protecting the victims of fraud from identity theft?
Mr. MEYENBURG. I don’t know all of the details that go in with
the GUARD Act, but I do think that there is—there is always more
we can do to protect not only ourselves, our loved ones, our neigh-
bors, our families, all of that. So I do believe there is more that we
can do, absolutely.
Mr. HORSFORD. Do you agree that having an Inspector General
who oversees protecting taxpayers is an important function?
Mr. MEYENBURG. Absolutely.
Mr. HORSFORD. And that person being fired is preventing that
protection being in place at this time?
Mr. MEYENBURG. Absolutely.
Mr. HORSFORD. So, Mr. Chairman, why aren’t we addressing
DMwilson on DSK7X7S144PROD with HEARING
that today?
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00074 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
69
I yield back.
Mr. LAHOOD. Thank you, Mr. Horsford, for your questions.
That concludes our questions from committee members here
today. Let me just, again, acknowledge your statements today, your
testimony today, answering our questions.
We appreciate your expertise, your experiences, your suggestions,
very, very helpful here today, and to lay the context for what we
need to do between now and March 27th, which is to extend the
statute of limitations on this, for taxpayers and for this particular
program.
And so I look forward to working collaboratively, look forward to
working in a bipartisan way with my colleagues to get that done
on behalf of the taxpayers of the United States.
So with that, I will advise members that they have two weeks
to submit written questions to be answered later in writing. Those
questions and your answers will be made part of the formal record.
With that, the committee stands adjourned. Thank you.
[Whereupon, at 3:48 p.m., the subcommittee was adjourned.]
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00075 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00076 Fmt 6633 Sfmt 6602 E:\HR\OC\A658.XXX A658
MEMBER QUESTIONS FOR THE RECORD
DMwilson on DSK7X7S144PROD with HEARING
(71)
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00077 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
72
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 37 here 59658A.037
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00078 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
73
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 38 here 59658A.038
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00079 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
DMwilson on DSK7X7S144PROD with HEARING
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00080 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
PUBLIC SUBMISSIONS FOR THE RECORD
DMwilson on DSK7X7S144PROD with HEARING
(75)
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00081 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
76
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 39 here 59658A.039
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00082 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
77
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 40 here 59658A.040
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00083 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
78
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 41 here 59658A.041
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00084 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
79
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 42 here 59658A.042
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00085 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
80
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 43 here 59658A.043
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00086 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
81
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 44 here 59658A.044
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00087 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
82
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 45 here 59658A.045
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00088 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
83
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 46 here 59658A.046
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00089 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
84
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 47 here 59658A.047
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00090 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
85
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 48 here 59658A.048
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00091 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
86
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 49 here 59658A.049
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00092 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
87
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 50 here 59658A.050
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00093 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
88
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 51 here 59658A.051
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00094 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
89
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 52 here 59658A.052
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00095 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
90
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 53 here 59658A.053
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00096 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
91
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 54 here 59658A.054
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00097 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
92
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 55 here 59658A.055
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00098 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
93
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 56 here 59658A.056
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00099 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
94
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 57 here 59658A.057
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00100 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
95
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 58 here 59658A.058
VerDate Sep 11 2014 06:00 Apr 24, 2025 Jkt 059658 PO 00000 Frm 00101 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
96
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 59 here 59658A.059
VerDate Sep 11 2014 00:11 Apr 26, 2025 Jkt 059658 PO 00000 Frm 00102 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
97
DMwilson on DSK7X7S144PROD with HEARING
Insert offset folio 60 here 59658A.060
VerDate Sep 11 2014 00:11 Apr 26, 2025 Jkt 059658 PO 00000 Frm 00103 Fmt 6601 Sfmt 6601 E:\HR\OC\A658.XXX A658
File and source
- File
- CHRG-119hhrg59658.pdf
- Size
- 17,601,368 bytes
- SHA-256
- f3681ec8bee0ee1438f197d7e54a5556a4e117ab97f50d3abb833ff367d520d6
- Our copy
- CHRG-119hhrg59658.pdf
- Original
- www.govinfo.gov