GAO-25-107508: Fraud Risk in Federal Programs: Continuing Threat from Organized Groups Since COVID-19
Summary
GAO-25-107508, Fraud Risk in Federal Programs: Continuing Threat from Organized Groups Since COVID-19, a Government Accountability Office Q&A report to congressional committees dated July 10, 2025. It describes organized fraud groups, both domestic and transnational, and agencies' roles in preventing and detecting such fraud. Citing GAO analysis of Department of Justice statements and court documentation from March 2020 through December 2024, it states that 46 percent of the 1,875 defendants convicted of pandemic fraud-related offenses with final charges recorded had conspiracy charges. It states that estimates from PPP, COVID-19 EIDL and Unemployment Insurance programs put losses around $300 billion. It gives the example of a hospice owner and a conspirator who, it states, stole over $9 million from Medicare.
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U.S. Government Accountability Office
Fraud Risk in Federal Programs: Continuing
Threat from Organized Groups Since COVID-19
GAO-25-107508
Q&A
Report to Congressional Committees
July 10, 2025
Why This Matters Organized groups of individuals working together have defrauded public
assistance programs, as was evident during the COVID-19 pandemic. Aided by
technology, organized fraud groups have targeted programs at a larger volume
and with greater speed than individual fraudsters. Using various fraud schemes,
technology, and key information—such as stolen personally identifiable
information (PII)—organized fraud groups, both domestic and transnational,
continue to pose a threat to public programs.
In April 2025, we reported on fraud schemes and risks affecting federally funded
assistance programs during the pandemic. This includes fraud committed both by
individual opportunists and organized groups. According to our analysis of
Department of Justice (DOJ) public statements and court documentation from
March 2020 through December 2024, 46 percent of the 1,875 defendants
convicted of pandemic fraud-related offenses with final charges recorded had
conspiracy charges, suggesting involvement of an organized fraud group. 1
Although the full extent of pandemic relief fraud is not known, estimates from
some of the largest programs—Paycheck Protection Program (PPP), COVID-19
Economic Injury Disaster Loan Program (COVID-19 EIDL), and regular and
temporary Unemployment Insurance (UI) programs—put losses around $300
billion. 2 Some of these losses are associated with organized groups. For
example, from January 2018 through May 2021, a hospice owner and a
conspirator filed fraudulent claims and paid kickbacks to steal over $9 million
from Medicare. The group carried out additional schemes to obtain fraudulent
funds from three pandemic relief programs—the Provider Relief Fund, PPP, and
COVID-19 EIDL.
The CARES Act includes a provision for us to monitor and oversee the federal
government’s efforts to prepare for, respond to, and recover from the COVID-19
pandemic. 3 This report provides information on organized fraud risks to public
programs, including pandemic-relief programs, and agencies’ roles in preventing
and detecting such fraud.
Key Takeaways • Organized fraud groups vary in size, structure, and participants and have
defrauded programs on a large scale using technology, program knowledge,
and other means. These groups harm people, programs, and society in
financial and nonfinancial ways that deplete program funds and cause
physical and psychological harm.
• Program managers, oversight and payment integrity entities, and law
enforcement across the government have roles in preventing, detecting, and
responding to organized fraud and use a range of data analytic tools to do so.
Page 1 GAO-25-107508 Organized Fraud
• Evolving fraud tactics, data and systems silos, and the need to balance
program delivery with fraud controls are some of the challenges to overcome
when preventing and detecting organized fraud. However, comprehensive
fraud risk management, education, analytics improvements, and collaboration
can enhance efforts to prevent and detect organized fraud.
• To enhance fraud risk management, we made 173 recommendations to over
40 agency or program offices from July 2015 through August 2023. Agencies
had taken actions to address 78 of these recommendations but had yet to
fully address 95 of them, as of August 2023.
How are fraud groups Organized fraud groups vary in size, structure, and participants. They generally
organized? fall into three types, based on our analysis of fraud cases and information from
state, federal, and foreign officials. The three types are (1) organized criminal
enterprises, (2) groups organized around a program, and (3) opportunistically
organized groups. (See fig. 1) These groups are not mutually exclusive, and a
given group may have features of two or more types. Cases involving organized
fraud groups range in size from two fraudsters to hundreds. Group structures
may be simple, such as a mastermind assisted by someone who produces and
sells fraudulent program documentation. Their structures may also be complex,
involving multiple cells within the group, each responsible for different tasks to
carry out the fraud.
Figure 1: Types of Organized Fraud Groups Targeting Government Programs
Participants in organized fraud groups may include domestic and foreign
individuals (as shown in fig. 2 below). These participants may also be entities
internal or external to the program.
• Fraudsters internal to a program may receive program benefits, deliver
benefits through the program, or administer the program, as shown in figure 3
below.
• Fraudsters external to a program are not connected to the program but have
exploited program vulnerabilities, as shown in figure 4 below.
Organized criminal enterprises. These groups involve established criminal
syndicates that may have other lines of illicit activity in addition to fraud. They are
generally large and operate with corporate-like structures where individuals or
cells act in specialized roles. For example, one cell may focus on procuring
Page 2 GAO-25-107508 Organized Fraud
stolen identities; another on electronically preparing and submitting fraudulent
documents; and yet another on moving, laundering, and disbursing proceeds.
Fraudsters participating in organized criminal enterprises are often external to the
program and operate across geographic and legal jurisdictions. For example,
these groups have included large transnational criminal enterprises, such as
those based in China, Italy, Mexico, Nigeria, Romania, and Russia. Nation-states
such as the North Korean government also pose a significant threat. 4
Figure 2 provides an example of a fraud scheme perpetrated by an organized
criminal enterprise against a public assistance program and lays out the fraud
scheme participants, the targeted program, and amount of fraudulently obtained
funds.
Figure 2: Fraud Scheme Perpetrated by an Organized Criminal Enterprise
Groups organized around a program. Groups organized around a program
involve program participants and facilitators who conspire to defraud the program
they are connected to. See figure 3. Program participants are individuals or
groups who receive public assistance benefits as well as others who are internal
to a program, such as those who deliver the benefits, including program
administrators, contractors, and grantees, among others. Program facilitators are
external individuals or groups in the private sector, for example, tax preparers or
attorneys, who may use their program knowledge to conspire with those applying
for and receiving benefits by providing fraudulent documentation. These groups
vary in size and structure and may involve legitimate businesses. Using program
knowledge and connections is a trademark of these groups, often relying on
corrupt actions of participants delivering the program.
Page 3 GAO-25-107508 Organized Fraud
Figure 3: Fraud Scheme Perpetrated by a Group Organized Around a Program
Opportunistically organized groups. These groups involve clusters of
individuals who come together as opportunities for fraud arise. Opportunistically
organized groups are generally smaller in size and simpler in structure than other
types of organized fraud groups. Fraudsters in these groups are external to the
program and are recruited from established communities, including online
communities. For example, this type of group may form when an individual learns
about a fraud scheme to exploit a public assistance program and then recruits
friends or family members to participate in the scheme for a kickback fee. See
figure 4 for an example of a fraud scheme perpetrated by an opportunistically
organized group.
Figure 4: Fraud Scheme Perpetrated by an Opportunistically Organized Group
For more information about the cases summarized in figures 2, 3, and 4, see
appendix I.
How have organized Organized fraud groups have used technology, program knowledge, and other
groups defrauded means to commit fraud on a large scale against a single program as well as
public assistance multiple programs simultaneously. These groups have used and reused stolen or
programs? fictitious PII and forged documentation to misrepresent or falsify eligibility for
public assistance programs, file fraudulent applications or claims, and obtain
Page 4 GAO-25-107508 Organized Fraud
benefits. 5 Organized groups have committed fraud on a large scale by taking
advantage of group participants’ specialized skillsets in carrying out different
functions in the scheme.
The stages of an organized fraud scheme include methods commonly used by
the three fraud group types, such as gathering materials and information,
defrauding programs on a large scale across multiple regions, evading detection,
and laundering fraudulently obtained funds, as shown in figure 5.
Figure 5: Stages of an Organized Public Assistance Fraud Scheme
Gathering information and materials. Organized groups begin a scheme by
gathering information and materials, such as PII, information about program
controls, and forged documents, to fraudulently obtain public benefits.
Page 5 GAO-25-107508 Organized Fraud
PII may be purchased or obtained by targeting groups of individuals. Organized
groups may purchase large volumes of stolen or synthetic identities on the dark
web. 6 Stolen PII can come from data breaches, hacking, or phishing. 7 These
groups may also target individuals whose PII would allow them to circumvent
program controls. For example, deceased or homeless individuals’ PII may be
less likely to be flagged by antifraud controls because these identities may not
have been reported as stolen or synthetic.
These groups gather information about, and target programs that allow,
individuals to qualify for benefits in many programs once they demonstrate
eligibility in one of them. 8 According to officials we spoke with from one state, for
example, fraudsters may enroll in Medicaid to more easily establish their financial
eligibility for the Supplemental Nutrition Assistance Program (SNAP), which has
been easier and more profitable to defraud due to the fraudsters’ ability to obtain
diverted cash benefits from Electronic Benefit Transfer (EBT) cards.
Organized groups also use social engineering methods and technologies, such
as social media and the dark web, to pull additional fraudsters into their
schemes. 9 In some cases, they deceive potential recruits about the true nature of
their scheme or coerce them into participating in the fraud. In other cases,
individuals join the scheme knowingly and willingly for the potential financial gain.
Committing fraud. Organized groups operate with volume and speed across
multiple regions and programs to fraudulently obtain public benefits. They target
public assistance programs at a larger volume and with greater speed than
individual fraudsters. For example, for agencies that need to manually review
applications, these groups will use bots and artificial intelligence (AI) to submit
large volumes of applications within minutes, often reusing information and
documentation across multiple applications. 10 Doing so can decrease the time a
reviewer has to inspect each document for fraud. These groups also target
programs that operate in multiple states or that are linked to other programs by
eligibility to access more program benefits, in more states, at the same time.
Evading detection. To evade detection, organized groups take advantage of
online services to apply for benefits, fraudulently obtain goods, and sell
fraudulently obtained goods. Accelerated by the pandemic, these groups have
taken advantage of the shift from in-person to online application and claims
processes to more easily circumvent eligibility and identity requirements.
Such groups have also fraudulently purchased goods online in large quantities to
resell. In October 2024, DOJ indicted one group for allegedly stealing over $2.4
million in SNAP benefits and using those stolen benefits to purchase large
quantities of sports drinks and baby formula from websites associated with
grocery stores, later reselling the goods on the black market. These groups have
also evaded eligibility requirements by coercing beneficiaries into selling their
benefits, often at a loss, and then trafficking the illegally purchased benefits
loaded onto SNAP EBT cards to third parties who use the benefits to fraudulently
purchase goods. 11
Organized groups also use various techniques to mask their location. For
example, they have spoofed their internet protocol (IP) addresses by using virtual
private networks (VPN) to hide the location of their operations. 12 These groups
may also conceal business information through opaque ownership structures
such as shell, shelf, and fake companies, and shifting business ownership to
conceal the identities of fraud scheme participants. 13 Organized groups may also
commingle legitimate and fraudulent business activity to evade detection. In the
case summarized in figure 3, for example, the organized group created dozens of
Page 6 GAO-25-107508 Organized Fraud
shell companies to enroll in the targeted program and to receive and launder the
fraudulent proceeds.
Organized groups quickly adapt to new or additional schemes and programs,
hopping between schemes and programs when their current fraud scheme is
detected or when they are incentivized by additional financial gain.
Laundering illicit funds. Organized groups recruit and use individuals known as
money mules to move fraudulently obtained funds through money laundering and
other techniques to obscure their illicit origins. 14 They may recruit money mules
to facilitate the movement of illegally obtained funds through multiple accounts, to
add complexity to the money trail, evade monetary reporting requirements, and
enhance the anonymity of their groups.
In addition to money laundering, organized groups employ layered financial
transactions, use prepaid debit cards, and leverage digital assets to efficiently
move funds to accounts where it is more difficult for law enforcement to trace and
recover funds. 15 These groups have used money mules as well as “structuring”—
breaking up fraudulently obtained funds into several smaller sums for deposit—to
avoid detection across many accounts.
How does organized Organized fraud harms people, programs, and society in many financial and
fraud harm people, nonfinancial ways that are worsened when carried out on a large scale. (See fig.
programs, and society? 6) The potential for large-scale harm applies not only to the number of people
whose benefits are stolen but also to the number of programs harmed. According
to one federal law enforcement agency, organized fraud may reach virtually
every public program benefit that exists, thereby harming society as a whole.
Figure 6: Examples of How Organized Fraud Harms People, Programs, and Society
Financial harm to people, programs, and society. Examples of such harm
include the following:
• Stolen benefits cause financial harm to people. This occurred in the case of
an organized fraud group accused of stealing over $181 million between June
Page 7 GAO-25-107508 Organized Fraud
2022 and February 2024 from people receiving SNAP and Temporary
Assistance for Needy Families benefits. That group did so by using card
skimming devices to steal account information and fraudulently withdrawing
cash or otherwise diverting funds from victims’ accounts. When this type of
activity happens, a person may be at the store trying to buy groceries only to
find that their EBT card has been depleted.
• A person may also suffer financially if they are unemployed and unable to
access UI benefits because a fraudster has already claimed the benefits
using their identity. 16
• Programs experience financial harm when they need to replace stolen
benefits, requiring additional taxpayer funds to maintain program delivery,
according to state and federal officials. 17
• Society is also financially harmed when public funds are lost to fraud and
withdrawn from the state or country, such as when pandemic funds were
fraudulently obtained and diverted to other countries around the world.
Nonfinancial harm to people. Organized fraud also causes significant
nonfinancial harm to people. For example, state officials told us that people may
be physically harmed when unnecessary medical tests are performed on them so
that fraudsters can bill Medicaid for those tests. Additionally, they said that
people may also be physically harmed if they are denied necessary medical
services because of an earlier fraudulent billing for those services.
Psychological harm is a concern when PII is stolen to perpetrate fraud, such as
when an organized fraud group stole hundreds of identities to further their UI and
Economic Impact Payment fraud schemes from January 2020 to October 2020.
As we have previously reported, the emotional trauma associated with identity
theft may be as devastating as many of the most violent offenses and contributes
to anxiety, among other symptoms. 18 Identity theft victims may also be harmed
again in future crimes using their stolen information.
Nonfinancial harm to programs and society. Organized fraud can cause
nonfinancial harm to programs and society. Nonfinancial harm to programs can
include reduced efficiency in aiding legitimate beneficiaries and harm to program
reputation when the public loses trust in the program’s ability to carry out its
mission, according to state and federal officials. When one program’s reputation
is harmed, it may also lead the public to lose trust in all programs. Society may
also be harmed by organized fraud, for example, when the only SNAP retailer in
a community is disqualified from accepting SNAP benefits due to fraud, resulting
in a lack of access to food for the community.
On a larger scale, national security can be threatened when organized fraud
disrupts government information systems, potentially exposing sensitive
information to unauthorized disclosure, alteration, and destruction. Additionally,
communities and the nation’s security are placed at risk when organized fraud
groups use relief funds to further other criminal activity, such as activity involving
drugs or guns.
How did organized Organized fraud groups exploited the pandemic environment’s increased
fraud groups exploit opportunity, incentive, and rationalization for fraud against public programs. As
the pandemic we have previously reported, while fraud risk may be greatest when all three risk
environment? factors of the fraud triangle—opportunity, incentive, rationalization—are present,
one or more of these factors may indicate a fraud risk. 19 (See fig. 7) The
emergency environment and the need to distribute funds quickly resulted in an
escalation and expansion of organized fraud groups targeting public programs
Page 8 GAO-25-107508 Organized Fraud
according to state, federal, and foreign officials we heard from, and our prior
reporting.
Figure 7: Three Risk Factors of the Fraud Triangle
Opportunity. Opportunity refers to circumstances that allow fraud to occur.
Opportunity for fraud increased during the COVID-19 pandemic because of the
infusion of funds—over $4.6 trillion in the U.S.—provided to help the nation
recover from the pandemic. For example, according to the Small Business
Administration, by October 2020, the agency had disbursed an amount that was
more than three times the disaster loans that it made in all years combined since
the agency’s creation in 1953.
Also, fewer barriers existed to accessing pandemic relief funds. For example,
some programs relied on self-certification or shifted from in-person to online
application processes. This shift made it easier for organized fraud groups to
circumvent eligibility and identity requirements and defraud programs in large
volumes and with great speed, according to federal officials we received
responses from.
Aided by advancing technologies, fraudsters seized on this shift to more virtual-
based processes to gather information to defraud public programs. For example,
they spoofed websites mimicking legitimate UI benefit sites to harvest sensitive
information. Organized fraud groups also used social media to harvest, steal, and
sell information to use in schemes against public programs, advertise their
services, and share methods to circumvent program controls, according to
federal officials.
Incentive. Incentive, or pressure, can provide a motive to commit fraud. During
the COVID-19 pandemic, organized fraud groups exploited public programs in
part because they were high-value, low-risk targets. According to federal and
state oversight officials we heard from, public programs are a low-risk target,
especially compared with other illicit activity that organized criminal enterprises
may be involved in, such as drug trafficking or violent crimes. Because of this
environment, groups that may not previously have been in the business of
defrauding public programs may have been incentivized to do so during the
pandemic.
The pandemic environment contributed to individuals feeling financial pressure,
which organized fraud groups could take advantage of to recruit individuals to
Page 9 GAO-25-107508 Organized Fraud
participate in fraudulent schemes. To pursue their targets, fraud groups also took
advantage of the added pressure, using more aggressive tactics, such as calling
customer service lines or a state representative after being denied a claim, to try
to obtain the benefits or put pressure on program officials, a state official told us.
Further, federal officials told us that public awareness of successful attempts to
defraud public programs incentivized additional attempts. Specifically, they told
us that fraudsters have celebrated their successes on social media, leading to
more attempts to defraud public programs.
Rationalization. Rationalization refers to the attitudes, character, or ethical
values that allow someone to justify committing fraud. There has been an
increasing propensity for, and acceptance of, fraud, according to state and
foreign officials. Instances of fraud can normalize additional fraudulent behavior,
leading the public to believe that “fraud happens all the time,” that “everyone is
doing it,” and they are simply getting what they are owed. Organized fraud
groups, using technology, may more efficiently propagate their justifications for
committing fraud and continually reinforce those attitudes within society.
What roles do federal Program managers; oversight and payment integrity entities, such as auditors
and state agencies play and comptrollers; and law enforcement at federal and state levels play roles in
in combatting fraud? preventing, detecting, and responding to fraud, including fraud committed by
organized groups. According to GAO’s Fraud Risk Framework, fraud prevention,
detection, and response activities are interdependent and mutually reinforcing. 20
Figure 8 provides examples of activities to prevent, detect, and respond to fraud
affecting government agencies, for each of the entities with a role.
Figure 8: Examples of Activities Government Agencies Use to Prevent, Detect, and Respond
to Fraud
Note: These are examples of activities and not comprehensive. For more information about fraud risk
management and internal control activities, see GAO, A Framework for Managing Fraud Risks in Federal
Programs, GAO-15-593SP (Washington, D.C.: July 2015); and GAO, Standards for Internal Control in the
Federal Government, GAO-25-107721 (Washington, D.C.: May 2025).
Page 10 GAO-25-107508 Organized Fraud
Program managers. Program managers are responsible for administering public
programs while combatting fraud. Some programs, such as SNAP, Medicaid, and
UI, have both federal and state program managers with distinct responsibilities.
For example, for Medicaid, federal program managers approve states’ plans for
administering Medicaid, while states provide day-to-day administration of
benefits. If program managers detect potential fraud, they may compile case
information about the suspected fraud to support oversight and refer to law
enforcement for investigation.
Program managers can also take administrative action against potential fraud. At
the federal level, the Centers for Medicare and Medicaid Services (CMS) may
suspend payments or require prepayment reviews for providers or suppliers
participating in Medicare that have acted suspiciously. For example, CMS
officials described a case in which suppliers fraudulently charged for catheters to
test CMS’s payment process before increasing the volume and dollar amount of
their fraudulent claims. Using its fraud prevention data tool, CMS reported
stopping over 99 percent of the payments before they went out the door and
revoked enrollment of 15 potential bad actors from Medicare, preventing over
$4.2 billion in payments, as of July 6, 2024. CMS officials noted that
administrative actions, like payment suspensions, allow them to react quickly to
prevent potentially fraudulent activity.
According to program managers we spoke with, their priority is to administer
benefits timely and accurately, while also preventing fraud. Some examples we
heard from program managers of internal control activities to prevent, detect, and
respond to fraud, including fraud committed by organized groups, are to do the
following:
• Prevent: Require that employees have a separation of duties and are given
assignments and cases to review at random,
• Detect: Use data analytics to pause applications with suspicious
characteristics for manual review, and
• Respond: Reset the Personal Identification Number for stolen EBT cards to
mitigate theft.
UI officials from one state described using data flags to detect fraudsters that had
stolen account passwords of legitimate UI beneficiaries in order to change the
bank information and obtain the benefit for themselves. Officials said that in
response, they contact beneficiaries to confirm whether they intended to change
their bank information.
Oversight and payment integrity entities. Oversight entities are independent
entities that combat fraud by conducting program audits or making internal
control recommendations to program managers. 21 These entities vary by state
and program in their authorities and include federal and state offices of
inspectors general (OIG), auditors, comptrollers, and Medicaid Fraud Control
Units (MFCU). Federal OIGs are responsible for investigations within their
affiliated agencies, while state auditors and comptrollers are generally
responsible for audits and financial management within their state.
Because oversight entities’ authorities can span multiple states or programs, their
roles are particularly useful in combatting organized fraud, which often crosses
state and program lines, according to oversight officials. In particular, the
Pandemic Response Accountability Committee (PRAC) brings together
inspectors general from across the federal government and also works closely
with state and local oversight partners. 22 The PRAC’s unique positioning allows it
to identify fraud risks across agency and program lines. 23
Page 11 GAO-25-107508 Organized Fraud
Oversight entities use program audits to detect and respond to fraud and make
recommendations to prevent future fraud. In one case, MFCU officials told us
they audited for-profit nursing homes and found that the owners siphoned
revenue to themselves at the expense of staff positions focused on resident
health and safety. The officials recommended that the program implement
preventive measures, including specifying minimum staffing levels. Oversight
entities may also take steps to recover fraudulently obtained funds.
Payment integrity entities, such as the Department of the Treasury’s Bureau of
the Fiscal Service are responsible for supporting fraud prevention and detection
by ensuring that government disbursements are secure, accurate, and legitimate.
The Fiscal Service provides services at no cost to help federally funded
programs—including those administered by states—address common payment
integrity challenges. These services include payment eligibility verification
through the Treasury’s Do Not Pay portal and Account Verification Service. 24
According to Treasury officials, the Fiscal Service currently works with over 60
federally funded programs to provide access to these services. The Fiscal
Service also monitors and shares cross-government transaction data to detect
fraud and provide analytics and reporting support to oversight and law
enforcement partners. In fiscal year 2024, its efforts combatting improper
payments and fraud yielded $7.2 billion in prevention and recovery, according to
Fiscal Service officials.
Law enforcement. Law enforcement agencies are responsible for detecting and
responding to fraud by conducting civil and criminal investigations, prosecutions,
and recoveries. They also work to dismantle organized fraud groups and prevent
the transfer of criminal funds within and outside the U.S. These activities may
also prevent fraud, as the possibility of punishment discourages fraudulent
behavior. At the federal level, law enforcement agencies include, for example,
those within DOJ; the Department of Homeland Security (DHS); and certain
OIGs. At the state level, these include the state Attorney General and local
police. For example, the investigations and response related to the case
summarized in figure 2 involved multiple law enforcement agencies, including
those within DOJ, DHS, Treasury, and local police departments.
What role does data Federal and state agencies use a range of data analytic tools, from basic
analytics play in techniques like data matching to advanced techniques like network analytics, to
combatting organized prevent and detect threats from organized fraud groups. Data analytic tools can
fraud groups? be used to identify indicators of fraudulent activity. According to federal and state
officials, fraud indicators are generally the same for groups and individuals.
However, federal and state officials stated, organized fraud groups may be
distinguished by the following three indicators that may be identified using data
analytics:
Scale. A large number of actions occurring within a short period of time. For
example, groups submit thousands of applications for public benefits within a
short period of time that may use similar identifying information.
Connections. Relationships between people, entities, or other associated data
points. For example, multiple participants connected by the same PII used to
obtain information on thousands of SNAP EBT cards.
Outliers. Data points outside of what would ordinarily be seen. An organized
fraud group might submit, for example, reimbursement claims to Medicaid that
are unreasonable based on geography or time.
Page 12 GAO-25-107508 Organized Fraud
The range of tools in figure 9—from basic to advanced—can help in preventing
and detecting fraudulent activity. Advanced tools can be particularly helpful in
identifying indicators of organized fraudulent activity: scale, connections, and
outliers.
Figure 9: Range of Data Analytic Tools for Preventing and Detecting Fraud
Note: More information about how data analytic tools can be used to prevent and detect fraud is available at
GAO, A Framework for Managing Fraud Risks in Federal Programs, GAO-15-593SP (Washington, D.C.: July
28, 2015); and Chief Financial Officers Council and the Bureau of the Fiscal Service, Program Integrity: The
Antifraud Playbook (Oct. 17, 2018), https://www.cfo.gov/assets/files/Interactive-Treasury-Playbook.pdf.
Federal and state officials told us they use these tools to identify indicators of
organized fraud groups. PRAC officials, for example, told us that they have used
data analytics to identify organized fraud groups and to assist OIGs, including a
case where they helped to uncover nearly $109 million in fraudulent loan
applications, leading to guilty pleas in March 2025. Officials also provided the
following examples of how data analytic tools can be used to identify fraud
indicators.
Page 13 GAO-25-107508 Organized Fraud
Edit checks to identify ineligible and suspicious transactions. When
fraudsters submit applications at or above the income level required for program
eligibility, edit checks can be used to reject ineligible applicants or identify
applicants for further screening.
Data matching to identify anomalies. When fraudsters submit applications
using stolen PII or fake identities, information provided in the applications can be
matched against information from established databases to verify applicant
information.
Data mining to identify suspicious connections and patterns. Data mining
can be used to identify fraud that involves, for example, billing for medical
transportation trips that are unreasonable based on geography or time.
Predictive analytics to identify outliers and anomalies. Developing algorithms
based on known organized fraud group indicators, such as indicators related to
IP addresses and usernames, can help develop a predictive model to identify
similar patterns of organized fraudulent activity.
Network analytics to analyze relationships and identify connections. A
single suspicious address can be used as a starting point to identify hundreds of
applicants or recipients with the same address.
Further, data analytic techniques are also used to respond to fraud. For example,
during an investigation, law enforcement can map relationships between people,
entities, or other information to identify key players in a group or connect
individuals to identify an organized fraud group. From July 2015 through August
2023, we made 47 recommendations to federal agencies related to the use of
data analytics. Of the 47 recommendations, a little more than half have been
implemented as of April 2024. See appendix II.
What are the Officials from federal and state agencies that we received responses from cited
challenges in evolving fraud tactics, data and systems silos, and efforts to balance program
preventing and delivery with fraud controls as challenges to program managers, oversight and
detecting organized payment integrity officials, and law enforcement in preventing and detecting
organized fraud. (See fig. 10).
fraud?
Page 14 GAO-25-107508 Organized Fraud
Figure 10: Challenges Cited by Federal and State Officials to Prevent and Detect Organized
Fraud
Federal and state officials provided the following insights on these three
challenges:
Evolving fraud tactics. Federal and state officials told us that the increased use
of stolen identities from data breaches, synthetic identities, and widespread
availability of advanced technological tools, such as AI and bots, will continue to
pose major challenges for officials who are continuously “one step” behind
organized fraud groups. Officials from one agency stated that organized groups
increasingly rely on obtaining large volumes of PII from data breaches, phishing
attacks, and the purchase of stolen records from the dark web. An official from
another agency said that organized groups may use AI and bots to facilitate fraud
schemes, allowing them to file claims in rapid succession seconds or minutes
apart. The widespread availability of these tools can allow individual fraudsters to
operate at a level similar to organized fraud groups.
Data and systems silos. Data and systems silos are created by different system
architectures and legal requirements. IT system architecture can create data
silos fostering an environment where fraudsters can purposely target more than
one agency, according to federal and state officials. There are many different
data systems, and the systems are not interoperable, according to one official.
According to other officials, even when data can be obtained, data need to be
cleaned to be usable and, by the time that is done, the data are outdated. These
challenges can be compounded by a lack of advanced analytical tools to aid in
the identification of emerging fraud schemes and modern case management
systems that allow for information sharing, said officials from another agency.
Page 15 GAO-25-107508 Organized Fraud
Legal requirements aimed at protecting privacy and safeguarding personal
records can limit information and data sharing for the purposes of preventing and
detecting organized fraud. Officials from one government-wide federal oversight
agency reported needing almost 70 different agreements to access the data
necessary to fulfill its oversight responsibilities. Additionally, a state official told us
that each program is restricted to sharing data within the program. There are also
limits to interagency information sharing. For example, according to one state
agency administering a federally funded state program, they are restricted by
state and federal laws from sharing information among state programs, such as
information on individuals and what state services they use in total. This can limit
the ability to connect fraudsters to potential fraud across states and state
programs. Obtaining critical data, such as tax records to verify an applicant’s
identity or program eligibility, while also safeguarding the data, is also time and
resource intensive, according to federal officials. 25
Balancing program delivery with fraud control activities. Multiple state
program officials we interviewed discussed the challenge of balancing efficient
program delivery with fraud control activities. State UI program managers
discussed the challenge of needing to meet federal program requirements for
timely benefit payments while also implementing fraud controls, such as identity
verification. Additionally, according to a state program official, fraud impacted
staff’s ability to help legitimate program applicants, increasing wait times in that
state.
According to GAO’s Fraud Risk Framework, although pressures to deliver
benefits quickly may appear at odds with fraud controls—which can slow
program delivery to ensure that benefits are provided to eligible recipients in the
right amount—the purpose of proactively managing fraud risks is to facilitate, not
hinder, the program’s mission.
What kinds of actions Comprehensive fraud risk management, education, analytics, and collaboration
promote prevention promote organized fraud prevention and detection. Federal officials we received
and detection of responses from noted that it is not possible to eliminate all risk associated with
organized fraud? public assistance programs, but that fraud risk can be managed through a
multilayered approach, using various controls and mitigation tactics. Leveraging
these approaches is particularly important, given the continuing threat from
organized groups, which have learned to target public programs throughout the
COVID-19 pandemic.
To enhance fraud risk management, we made 173 recommendations to over 40
agency or program offices from July 2015 through August 2023. Agencies had
taken actions to address 78 of these recommendations, but had yet to fully
address 95 of them, as of August 2023. See appendix II for further information on
our prior recommendations related to fraud risk management.
Comprehensive fraud risk management. As we have found in our prior work,
comprehensive fraud risk management involves being prepared to manage fraud
risks when the environment changes, such as during a future emergency. 26
Agencies were unprepared to combat the new fraud environment of the COVID-
19 pandemic. 27 Following the leading practices in GAO’s Fraud Risk Framework,
for example, to regularly conduct fraud risk assessments, helps to prepare for
future emergencies. 28 Federal, state, and foreign officials we heard from agreed
that it is important to continually adapt and respond so that they are prepared for
the next major fraud event.
Page 16 GAO-25-107508 Organized Fraud
Conducting fraud risk assessments at the program development stage, and
throughout program administration, is an action that entities have used to help
prevent and detect organized fraud. For example, program managers and
oversight entities, such as OIGs and the PRAC, started holding “Gold Standard”
meetings to discuss fraud controls before launching new programs. These
meetings began in 2021 as a “lesson learned” from early pandemic relief
implementation. Similarly, the United Kingdom (UK) Public Sector Fraud
Authority (PSFA) said that it supports UK public entities in understanding their
fraud risks and in developing and implementing preventive controls at the earliest
stage of policy development. 29
Education. Federal, state, and foreign officials we received responses from
noted that increasing program managers’ awareness of potential fraud schemes
through education can enable them to better prevent and detect fraud. For
example, Internal Revenue Service officials noted that to stay adaptive to new
fraud methods, they use capacity-building efforts, such as training staff to use
sophisticated analytical tools, holding data analytics workshops, and working with
public sector experts and academic institutions.
Analytics. Government programs can continue to promote organized fraud
prevention and detection using analytic tools and data sharing. Department of
Labor (DOL) OIG officials noted that fraud data analytics are particularly
important for uncovering cross-state, large-scale organized fraud schemes.
Multiple federal agencies offer data hubs for state agencies to cross-check
whether a beneficiary has applied for or received benefits in another state. 30
State UI officials described using the DOL-funded Integrity Data Hub to identify
claims from suspicious bank accounts, Social Security Numbers, and IP
addresses for manual review.
PRAC officials noted that fraud is best dealt with when information is centralized.
For example, the PRAC’s centralized data analytics center—Pandemic Analytics
Center of Excellence (PACE)— has helped detect “multidipping,” where a group
obtains benefits across multiple programs. As of January 2025, the PACE has
supported 48 OIG and federal law enforcement partners in more than 1,000
pandemic-related investigations involving over 23,000 subjects and more than
$2.4 billion in estimated fraud loss. Similarly, the UK’s PSFA’s National Fraud
Initiative collects and analyzes data from over 1,100 public and private entities to
identify inconsistencies that may indicate fraud. Treasury’s cross-government
analytics support offered by the Fiscal Service is yet another example. Multiple
domestic program managers noted that having data from other federal and state
agencies would promote fraud prevention and detection. UI officials from one
state said that having access to tax return data to match to a person’s UI
attestation in advance of distributing funds could help prevent fraud. For
example, officials from that state reported that in November 2020, they were able
to run a one-time match, which found that 380,000 people were granted UI
benefits without having a recent tax return in the state.
Collaboration. In addition to facilitating data sharing, interagency and inter-
governmental collaboration can help prevent, detect, and respond to organized
fraud.
Interagency collaboration: Combatting organized fraud can require the
coordinated efforts of multiple agencies. 31 For example, the COVID-19 Fraud
Enforcement Task Force (CFETF) brought together oversight entities and law
enforcement officials from different federal agencies to investigate and
prosecute fraud committed against pandemic programs, including organized
fraud. CFETF established five multiagency task forces that include federal
Page 17 GAO-25-107508 Organized Fraud
inspectors general and law enforcement officials, with the stated goal of
combatting the most impactful criminal pandemic fraud cases, often involving
multiple CARES Act programs, foreign actors, violent perpetrators, or large
loss amounts. 32 Additionally, as the federal government’s central disbursing
entity, Treasury’s Fiscal Service collaborates with numerous federal agencies
to support fraud prevention and detection.
Inter-governmental collaboration: Because federal and state entities may
have related responsibilities but different access to information, coordination
between levels of government is helpful in antifraud efforts. 33 Both law
enforcement and oversight officials we spoke with reported that it can be
difficult to determine which entity, whether federal, state, or local, might
pursue a fraud case. To address this challenge, DOJ’s Organized Crime Drug
Enforcement Task Force officials—whose work includes combatting
organized fraud threats—described its Fusion Center that works on case
coordination and deconfliction by sharing information across investigating
agencies. Further, state program managers we spoke with noted that their
federal counterparts could play a useful role in sharing best practices and
lessons learned from other state program managers.
Agency Comments We provided a draft of this report to DHS, DOJ, and Treasury for review and
comment. We incorporated technical comments from DHS, DOJ, DOL, and
Treasury as appropriate.
How GAO Did This To answer these questions, we conducted a literature review; reviewed relevant
Study fraud cases and other documentation; and interviewed and obtained written
responses from selected federal, state, and foreign entities.
Specifically, we conducted a literature review of relevant documentation covering
the past 10 years, including GAO and other government publications, scholarly
articles, and news reports related to organized fraud. To describe characteristics
of organized fraud and provide examples of organized fraud cases, we also
reviewed DOJ press releases published in the last 10 years and related Public
Access to Court Electronic Records documents.
For inclusion in the scope of this review, we selected federal programs based on
our prior work involving pandemic-relief programs, program budget, and relevant
information regarding program fraud prevalence, for example, from GAO reports
and DOJ press releases. In selecting the public assistance programs, we
considered criteria, such as the size of the program’s budget and whether the
program was adjusted, for example, to reduce program controls or expand
benefit coverage, during the COVID-19 pandemic. We define public assistance
programs as those that provide either cash assistance or in-kind benefits, such
as a good or service, from any governmental entity, to include social welfare and
social insurance programs. Selected programs include over 20 public assistance
programs that are federally administered, for example, Economic Impact
Payments and Medicare, and those that are state administered (Medicaid,
SNAP, and UI).
We selected federal entities that either (1) oversaw the programs in scope or (2)
had a law enforcement or oversight role related to organized fraud. The eight
federal agencies we selected based on the programs in scope are the
Departments of Agriculture, Education, Health and Human Services, Homeland
Security, Labor, and Treasury; and the Small Business and Social Security
Administrations. The 12 agencies we selected based on their law enforcement or
oversight roles were the Departments of Justice and State, the Office of
Page 18 GAO-25-107508 Organized Fraud
Management and Budget, Pandemic Response Accountability Committee, and
OIGs for the eight federal agencies that oversaw the selected programs.
We selected six states that administer Medicaid, SNAP, and UI programs, and
which could provide various perspectives on program integrity functions and
activities. For example, we identified states in which state auditors, inspectors
general, and antifraud entities have a program integrity role. We also reviewed
information about the number of reported fraud investigations related to those
programs. Based on this review, we initially selected four states: Florida,
Michigan, New York, and Washington. We selected an additional two states—
Tennessee and Wisconsin—using the same criteria to supplement information on
the SNAP program after we were unable to obtain responses from SNAP
program administrators for two of the initially selected states. For each selected
program, we interviewed officials and requested written responses to questions
about their perspectives on organized fraud and roles and responsibilities related
to program integrity and oversight.
To gather international perspectives on public sector fraud committed by
organized groups, we reviewed literature and interviewed counter-fraud officials
from selected countries. Specifically, we interviewed counter-fraud officials from
Australia, Canada, and the United Kingdom, with whom GAO collaborates as
part of the International Public Sector Fraud Forum. 34 We also interviewed
counter-fraud officials from the European Union and INTERPOL Washington, a
component of the DOJ which serves as a liaison between the nation’s domestic
law enforcement agencies and the International Criminal Police Organization,
commonly known as INTERPOL.
Lastly, we interviewed officials representing national associations, specifically,
the United Council on Welfare Fraud; the National Association of State Auditors,
Comptrollers and Treasurers; state officials recommended by the Association of
Inspectors General; and the National Association of Medicaid Fraud Control
Units.
The characteristics of organized fraud that we describe in this report are not
intended to be an exhaustive list. Similarly, examples of roles, data analytic tools,
challenges, and actions to promote organized fraud prevention and detection
described in this report are not intended to present a comprehensive, detailed
analysis of all such roles, tools, challenges, and actions that may exist with
regard to managing organized fraud risk in public programs.
We conducted this performance audit from April 2024 to July 2025 in accordance
with generally accepted government auditing standards. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis
for our findings and conclusions based on our audit objectives.
List of Addressees The Honorable Susan Collins
Chair
The Honorable Patty Murray
Vice Chair
Committee on Appropriations
United States Senate
The Honorable Mike Crapo
Chairman
Page 19 GAO-25-107508 Organized Fraud
The Honorable Ron Wyden
Ranking Member
Committee on Finance
United States Senate
The Honorable Bill Cassidy, M.D.
Chair
The Honorable Bernard Sanders
Ranking Member
Committee on Health, Education, Labor, and Pensions
United States Senate
The Honorable Rand Paul, M.D.
Chairman
The Honorable Gary C. Peters
Ranking Member
Committee on Homeland Security and Governmental Affairs
United States Senate
The Honorable Tom Cole
Chairman
The Honorable Rosa L. DeLauro
Ranking Member
Committee on Appropriations
House of Representatives
The Honorable Brett Guthrie
Chairman
The Honorable Frank Pallone, Jr.
Ranking Member
Committee on Energy and Commerce
House of Representatives
The Honorable Mark E. Green, M.D.
Chairman
The Honorable Bennie G. Thompson
Ranking Member
Committee on Homeland Security
House of Representatives
The Honorable James Comer
Chairman
The Honorable Robert Garcia
Ranking Member
Committee on Oversight and Government Reform
House of Representatives
The Honorable Jason Smith
Chairman
The Honorable Richard Neal
Page 20 GAO-25-107508 Organized Fraud
Ranking Member
Committee on Ways and Means
House of Representatives
We are sending copies of this report to the appropriate congressional
committees; the Secretary of the Department of Homeland Security, the Attorney
General of the United States, the Secretary of the Treasury; and other interested
parties. In addition, the report is available at no charge on the GAO website at
https://www.gao.gov.
GAO Contact For more information, contact: Rebecca Shea, Director, Forensic Audits and
Information Investigative Service, SheaR@gao.gov.
Public Affairs: Sarah Kaczmarek, Managing Director, Media@gao.gov.
Congressional Relations: A. Nicole Clowers, Managing Director,
CongRel@gao.gov.
Staff Acknowledgments: Toni Gillich, Irina Carnevale (Assistant Directors),
Yue Pui Chin (Analyst in Charge), John Mac Emery, Colin Fallon, Sarah Florino,
Nicole Mackowski, Joseph Rini, and Claire Rueth.
Connect with GAO on Facebook, X, LinkedIn, Instagram, and YouTube.
Subscribe to our Email Updates. Listen to our Podcasts.
Visit GAO on the web at https://www.gao.gov.
This is a work of the U.S. government but may include copyrighted material. For
details, see https://www.gao.gov/copyright.
Page 21 GAO-25-107508 Organized Fraud
Appendix I: Summary Figure 11 summarizes examples of fraud schemes perpetrated by three types of
of Selected Organized organized fraud groups—organized criminal enterprises, groups organized
Fraud Cases around a program, and opportunistically organized groups. The summaries
include descriptions of the organized groups, the programs they targeted, how
they carried out the fraud schemes, and examples of the potential harm they
caused.
Page 22 GAO-25-107508 Organized Fraud
Figure 11: Summary of Selected Organized Fraud Cases
a
Black Axe is a transnational crime syndicate originating in Nigeria. The syndicate has leadership at the
international, national, and local level and is generally broken down into city-specific zones. International
leadership consists of a President and High Council of Elders; national leadership consists of a National Body;
and local leadership consists of a Zonal Executive Council, Zonal Elder Council, and Zone Leader. The Zone
Leader leads members within the zone, some of whom serve in specialized roles. For example, a Chief Ihaza
acts as a treasurer; a Chief Eye acts as a secretary; and a Chief Butcher acts as the security officer, with there
being some additional roles in some zones.
Page 23 GAO-25-107508 Organized Fraud
Appendix II: GAO Since the issuance of GAO’s Fraud Risk Framework in 2015, we have made
Recommendations to numerous recommendations to enhance fraud risk management across federal
Enhance Fraud Risk programs. These include recommendations that federal agencies and programs
Management align their activities with leading practices in fraud risk management, such as by
assessing fraud risks and using data analytics. From July 2015 through August
2023, we made 173 recommendations to over 40 agency or program offices
related to fraud risk management. As of August 2023, agencies had taken
actions to address 78 of these recommendations but had yet to fully address the
remaining 95. 35
From July 2015 through August 2023, we made 47 recommendations to federal
agencies related to the use of data analytics, such as using data matching to
verify self-reported information. Using data analytics to manage fraud risks is one
of the leading practices in fraud risk management and can facilitate prevention
and detection of organized activity. Of the 47 recommendations, a little more than
half have been implemented, as of April 2024. 36
Federal agencies have seen benefits by mitigating fraud risks and implementing
data analytics while continuing to take steps to make data and tools available for
fraud data analytics. For example:
At the Small Business Administration (SBA):
• In June 2020, we recommended that SBA implement plans to respond to
risks in the Paycheck Protection Program (PPP), help ensure program
integrity, and address potential fraud. 37 In response, SBA developed a
loan review process in December 2020. As of the end of fiscal year 2023,
we estimated that SBA’s use of additional safeguards in the PPP and
other COVID-19 programs resulted in more than $12 billion in savings.
• In May 2023, we reported on fraud risks, including from organized groups,
in SBA pandemic relief programs. We recommended that SBA ensure it
(1) has mechanisms in place and utilizes them to facilitate cross-program
data analytics and (2) identifies external sources of data that can facilitate
the verification of applicant information and the detection of potential
fraud across its programs. 38 SBA agreed with these recommendations
and has taken steps to perform cross-program data analytics and to
pursue verification tools and data sharing with the Department of the
Treasury. However, as of May 2025, these recommendations remained
open, pending SBA’s documentation of its policy and plan, among other
actions. 39
At the Federal Aviation Administration (FAA):
• In March 2020, we reported on fraud and abuse risks in aircraft
registrations, including from organized groups. We recommended that
FAA ensure that information on aircraft owners and other key information
is recorded in a format that facilitates data analytics. 40 In June 2024, as
part of its IT modernization, FAA made that information available in
searchable PDF format, which facilitates data analytics.
• In the same report, we also recommended that FAA use data collected as
part of IT modernization—such as sanctions data and postal addresses—
to identify and analyze patterns of activity indicative of fraud or
abuse, including from organized groups, to support monitoring and risk-
based oversight. FAA agreed with the recommendation. As of December
Page 24 GAO-25-107508 Organized Fraud
2024, FAA was still implementing its Civil Aviation Registry Electronic
Services system, which would provide greater flexibility to query system
transactions to track specific data and trends associated with aircraft
registration.
We have also identified actions that Congress can take to further improve the
federal government’s capabilities to manage fraud risks. In March 2022, we
recommended 10 matters for congressional consideration, including the following
three matters that would help mitigate the risks of fraud, including from organized
groups. 41 All 10 remained open as of May 2025.
• Congress should establish a permanent analytics center of excellence to
aid the oversight community in identifying improper payments and fraud.
• Congress should reinstate the requirement that agencies report on their
antifraud controls and fraud risk management efforts in their annual
financial reports.
• Congress should amend the Social Security Act to accelerate and make
permanent the requirement for the Social Security Administration to share
its full death data with the Department of the Treasury’s Do Not Pay
working system.
Endnotes
1While allegations in an indictment are accusations that have not been proven, we have used the
inclusion of conspiracy charges in cases that ended with a conviction on any charges as a flag for
organized group activity.
2GAO, COVID Relief: Consequences of Fraud and Lessons for Prevention, GAO-25-107746
(Washington, D.C.: Apr. 9, 2025). The UI system includes UI programs that were established prior
to the COVID-19 pandemic, which we refer to as “regular” UI programs, and programs established
in response to the COVID-19 pandemic, which we refer to as “temporary” UI programs: Pandemic
Unemployment Assistance, Federal Pandemic Unemployment Compensation, Pandemic
Emergency Unemployment Compensation, and Mixed Earner Unemployment Compensation.
3Pub. L. No. 116-136, § 19010(b), 134 Stat. 281, 580 (2020). All of GAO’s reports related to the
COVID-19 pandemic are available on GAO’s website at https://www.gao.gov/coronavirus.
4Nation-state actors, such as China, Iran, North Korea, and Russia, are well-resourced and engage
in sophisticated malicious cyber activity that is targeted and aimed at prolonged system intrusion.
Nation-states may use more sophisticated fraud schemes, have entire government units dedicated
to defrauding the U.S., and can maintain greater operational stealth compared to many other
organized criminal enterprises, according to a federal official.
5PII is information that can be used to distinguish or trace the identify of an individual.
6A synthetic identity is a combination of real and fabricated personally identifiable information
where the implied identity is not associated with a real person.
7Phishing is the fraudulent practice of sending emails or other messages purporting to be from a
legitimate company or official government office to induce individuals to reveal personal
information.
8Policies that allow an individual to qualify for benefits in many programs once they demonstrate
eligibility in just one program are typically known as broad-based categorical eligibility policies.
9Social engineering is a form of deception that uses human psychology to target and manipulate
individuals and make them more susceptible to fraud.
10A bot, or internet robot, is a computer software that operates over networks, such as the internet,
and is made to automate certain tasks to simulate human activity.
Page 25 GAO-25-107508 Organized Fraud
11For additional information on trafficking and recipient eligibility fraud related to SNAP, see GAO,
Supplemental Nutrition Assistance Program: Observations on Employment and Training Programs
and Efforts to Address Program Integrity Issues, GAO-18-504T (Washington, D.C.: May 9, 2018).
For additional information on skimming related to SNAP, see U.S. Department of Agriculture, Food
and Nutrition Service, Supplemental Nutrition Assistance Program (SNAP)
Electronic Benefit Transfer (EBT) Theft (Nov. 26, 2024).
12A VPN establishes an encrypted connection between a computer and a remote server owned by
a VPN provider, creating a point-to-point tunnel that masks the IP address of the computer.
Spoofing is a mechanism that uses deliberately falsified information to appear to be from a
legitimate source. Fraudsters can spoof their IP address to make their IP address appear as a
legitimate source.
13Shell companies are corporations or limited liability companies that have no physical presence
beyond a mailing address, generate little-to-no independent economic value, and help conceal the
company's true ownership while providing the true owners with complete control over the
organization. Shelf companies are formed and then placed aside for years to give the appearance
of business longevity and legitimacy, as the length of time that a shelf company has been in
existence adds legitimacy to the entity. Shelf companies are a form of shell company until they are
used for real economic activities.
14A money mule is an individual that transfers illegally acquired money—either wittingly or
unwittingly—on behalf of, or at the direction of, another.
15Money laundering generally is the process of converting proceeds from illicit activities into funds
and assets in the financial system that appear to have come from legitimate sources. Money mules
have been associates of organized groups and have consisted of both knowing and unwitting
participants.
16
According to the Department of Labor (DOL), the agency took steps to help address this issue.
For example, DOL issued guidance to states to promote, among other things, identity verification.
DOL also developed an unemployment fraud reporting website to help people understand
unemployment identity fraud and to provide resources to help those experiencing such fraud.
17For SNAP, there is no longer authority at the federal level to replace stolen SNAP EBT benefits
after December 20, 2024.
18GAO, COVID Relief: Fraud Schemes and Indicators in SBA Pandemic Programs, GAO-23-
105331 (Washington, D.C.: May 18, 2023).
19GAO-25-107746.
20GAO, A Framework for Managing Risks in Federal Programs, GAO-15-593SP (Washington, D.C.:
July 28, 2015).
21Some oversight entities may also have law enforcement authorities. For example, the Inspector
General Act of 1978, as amended, and the Legislative Branch Inspectors General Independence
Act of 2019 generally authorize criminal investigators in the offices of certain inspectors general to
exercise law enforcement powers, including carrying a firearm while conducting official duties and
seeking and executing federal warrants for arrest.
22In March 2020, Congress created the Pandemic Response Accountability Committee (PRAC) as
part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). PRAC’s mission is to
promote transparency and use data to detect fraud, waste, abuse, and mismanagement. The
PRAC and its data analytics center are scheduled to sunset on September 30, 2025, unless
Congress takes action. GAO has recommended that Congress establish a permanent analytics
center of excellence to aid the oversight community in identifying improper payments and fraud.
GAO, Emergency Relief Funds: Significant Improvements Are Needed to Ensure Transparency
and Accountability for COVID-19 and Beyond, GAO-22-105715 (Washington, D.C.: Mar. 17, 2022).
23PRAC’s Blueprint for Enhancing Program Integrity highlights strategies for federal and state
program managers to develop, implement, and maintain strong internal controls, even during
emergencies. Pandemic Response Accountability Committee, Blueprint for Enhanced Program
Integrity Chapter 1: Best Practices for Strengthening Federal Programs (May 2024).
Page 26 GAO-25-107508 Organized Fraud
24Payment eligibility verification is an examination of payment data such as whether the payment is
being made to a proper account, whether the name of the accountholder aligns with the intended
payee, and other financial integrity data elements. Payment eligibility verification does not
independently assess program participation eligibility. The initial determination of whether an
intended payee is eligible for participation in a program is determined by the agency administering
that program.
25As discussed above, the Fiscal Service provides services at no cost to help federally funded
programs—including those administered by states—address common payment integrity
challenges. These services include payment eligibility verification through the Treasury’s Do Not
Pay portal and Account Verification Service.
26GAO-15-593SP; and GAO, Fraud Risk Management: Key Areas for Federal Agency and
Congressional Action, GAO-23-106567 (Washington, D.C.: Apr. 13, 2023).
27GAO, Emergency Relief Funds: Significant Improvements Are Needed to Address Fraud and
Improper Payments, GAO-23-106556 (Washington, D.C.: Feb. 1, 2023).
28GAO-15-593SP.
29The UK Public Sector Fraud Authority is the UK government’s center of expertise on the
management of public sector fraud whose mission includes developing capability in the public
sector to find, prevent, and respond to fraud.
30The UI Integrity Data Hub, which is funded by DOL and administered by the National Association
of State Workforce Agencies, shares UI data across states and is free for use by state workforce
agencies. The U.S. Department of Health and Human Services created the Public Assistance
Reporting Information System (PARIS). PARIS is a data matching service that checks to see if a
recipient has received benefits in two or more states.
31GAO, Government Performance Management: Leading Practices to Enhance Interagency
Collaboration and Address Crosscutting Challenges, GAO-23-105520 (Washington, D.C.: May 24,
2023).
32CFETF has resulted in over 3,500 defendants criminally charged, over 400 civil settlements and
judgments, and over $1.4 billion in fraudulently obtained CARES Act funds seized or forfeited,
according to its April 2024 report. Department of Justice, COVID-19 Fraud Enforcement Task Force
2024 Report (Washington, D.C.: April 2024).
33PRAC provides guidance highlighting lessons learned from federal, state, and local collaboration
in pandemic relief program implementation and oversight. Pandemic Response Accountability
Committee, Blueprint for Enhanced Program Integrity Chapter 4: Whole-of-Government Approach
(April 2025).
34The forum was established in 2017 by government officials from Australia, Canada, New Zealand,
the United Kingdom, and the United States. The goal of the forum is to use shared knowledge to
reduce the risk and harm of fraud and corruption in the public sector across the world.
35GAO, Fraud Risk Management: Agencies Should Continue Efforts to Implement Leading
Practices, GAO-24-106565 (Washington, D.C.: Nov. 1, 2023).
36GAO, Fraud and Improper Payments: Data Quality and a Skilled Workforce Are Essential for
Unlocking the Benefits of Artificial Intelligence, GAO-25-108412 (Washington, D.C.: Apr. 9, 2025).
37GAO, COVID-19: Opportunities to Improve Federal Response and Recovery Efforts, GAO-20-625
(Washington, D.C.: June 25, 2020).
38GAO-23-105331.
39GAO, Priority Open Recommendations: Small Business Administration, GAO-25-108048
(Washington, D.C.: May 1, 2025).
40GAO, Aviation: FAA Needs to Better Prevent, Detect, and Respond to Fraud and Abuse Risks in
Aircraft Registration, GAO-20-164 (Washington, D.C.: Mar. 25, 2020).
41GAO-22-105715.
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