Senators introduce bill to return stolen COVID unemployment money to taxpayers

WASHINGTON, D.C. – Sen. John Kennedy (R-La.) and Sen. Mike Crapo (R-Idaho) have introduced the Chase COVID Unemployment Fraud Act of 2023 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 pandemic may be over, but the financial damage is still hurting honest Americans. 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.

According to testimony provided by the Department of Labor (DOL) Inspector General, improper payments in pandemic unemployment programs have left taxpayers on the hook for at least $191 billion that people took illegally. 

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.

• Allowing states to retain five percent of state unemployment overpayments that they recover and dedicating those funds to preventing future fraud by:

• Hiring investigators and prosecutors to go after criminals to recover fraud payments.

• Modernizing state systems’ ability to verify identity and income for unemployment.

• Supporting additional program integrity activities to deter, detect and prevent improper payments.

• Preventing further fraud by requiring states to match unemployment claims and verify employment, in addition to preventing incarcerated people from receiving unemployment benefits and stopping payments to deceased people.

• Prohibiting the Biden administration from allowing states to waive suspicious overpayments by requiring the 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.

• Extending the statute of limitations for criminal charges or civil actions for prosecuting fraud from five to 10 years.