New bill aims to return stolen COVID unemployment money to taxpayers

WASHINGTON – Sen. John Kennedy (R-La.) and Sen. Mike Crapo (R-Idaho) introduced the Chase COVID Unemployment Fraud Act of 2022 to recover stolen COVID unemployment money and return it to taxpayers. The legislation encourages states to implement guardrails that would protect against future fraud.

“The greatest theft of taxpayer dollars in American history is the billions of COVID unemployment money that fraudsters stole. This bill will help recover that money and return it to taxpayers,” said Kennedy.

Of the roughly $163 billion in COVID unemployment insurance that people took illegally, states have only recovered about $4 billion. The bill would fight fraud by:

  • Incentivizing states to recover fraudulent unemployment payments by allowing them to retain 25 percent of the funds they recover from federal COVID unemployment programs. Workforce agencies currently have little incentive to go after fraud and must pay the up-front costs of hiring investigators and paying to prosecute fraud.
  • Preventing further fraud by requiring states to match unemployment claims and verify employment, in addition to preventing incarcerated people from receiving unemployment benefits.
  • Prohibiting the Biden administration from allowing states to waive suspicious overpayments by requiring the Department of Labor (DOL) to amend guidance that lets states off the hook for over-looking large volumes of suspicious unemployment claims.
  • Requiring the DOL to report on fraudulent overpayments and the amount of money states recover from fraudsters.

Rep. Kevin Brady (R-Texas) has introduced the bill in the U.S. House of Representatives.

Full text of the bill can he found here.

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