Waste of the Day: $750 Billion Annual Fraud

Topline: A former Government Accountability Office executive recently told 60 Minutes she believes the federal government loses $550 billion to $750 billion to fraud each year, an increase from previous estimates.

A monumental aggregate loss to fraud each year

Key facts: Last year a GAO study claimed that fraud costs the government $233 billion to $521 billion annually, though the authors noted, “We cannot eliminate the possibility that the actual amount of fraud could be outside of the range of our estimate.” 

Linda Miller, who spent 10 years at the GAO as an assistant director, said the estimate is too low. Her $750 billion figure represents more than 11% of all the money the government spent last year.

According to Miller, most of the money is stolen by “sophisticated criminals, often overseas,” with smaller amounts taken by individuals lying about eligibility for unemployment insurance or Social Security.

Foreign cybercriminals are now focusing on extreme weather, Miller said. When a storm occurs in America, fraudsters buy stolen identities from the zip code where the disaster happened and apply for federal grants and assistance. 

Bryan Vorndra, head of the FBI’s cyber division, told 60 Minutes that nearly every Americans’ personal info can be purchased online. The FBI is constantly putting new protections in place, but Miller said that just creates a game of “whack-a-mole.” 

“[Fraudsters are] seeing where better controls are being put in place. And then, they’re going to where the controls still haven’t been improved,” she said.

Miller, who served as deputy executive director on the Pandemic Response Accountability Committee, agreed with past estimates that $1 trillion was lost to fraud during the pandemic.

Throw money in the air for people to grab

“It was like they threw money in the air and just let people run around and grab it, she said.” Billions flowed to fraud rings in China and Russia who used stolen personal data to impersonate Americans.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.

Summary: If a private business consistently lost more than $1 of every $10 to fraud, it would soon close its doors. It’s time for the federal government to get fraud in check.

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This article was originally published by RealClearInvestigations and made available via RealClearWire.