Nearly six years after the height of the COVID-19 pandemic, federal investigators say close to $1 billion in unemployment benefits remains unspent and at risk of fraud, prompting a call for urgent action to recover the funds.
The U.S. Department of Labor’s Office of Inspector General (OIG) reported that approximately $720 million in pandemic-era unemployment insurance benefits is still sitting on prepaid debit cards issued during the crisis. In one case, a single account holds more than $76,000. Another $192 million has already been transferred to state unclaimed property offices, bringing the total potentially vulnerable amount to roughly $912 million.
Inspector General Anthony D’Esposito warned that the window to recover the money may be narrowing.
“My office has warned that, absent swift action, US taxpayers risk losing nearly a billion dollars in fraudulently obtained benefits,” D’Esposito said in a statement.
He added: “This is taxpayer money — and it demands immediate attention. We’ve done the investigative work. We’ve identified where the money is. There is no excuse for delay, and no acceptable outcome other than returning these dollars to the American people.”
The OIG’s review analyzed data from approximately 6.5 million prepaid debit cards distributed as part of pandemic relief programs. During the public health emergency, many states relied on prepaid debit cards to deliver unemployment benefits quickly, particularly to recipients without traditional bank accounts or those wary of sharing personal banking information. Other states used direct deposit or paper checks, depending on local systems.
D’Esposito is urging the Labor Department’s Employment and Training Administration to provide formal guidance to states, encouraging coordination with financial institutions and unclaimed property administrators to reclaim dormant funds before they are permanently lost.
He framed the issue not simply as bureaucratic housekeeping, but as a matter of economic fairness, noted The New York Post.
“Fraud isn’t a victimless crime. Every dollar stolen is a dollar that families don’t have for groceries, rent, health care, or gas. When we root out fraud, we protect taxpayers and lower the real cost of living,” he said.
The watchdog’s office has already reported significant enforcement activity tied to pandemic unemployment programs. To date, investigations have led to more than 1,800 convictions, over 2,300 individuals charged, and approximately $2.2 billion recovered.
Yet the newly identified $912 million underscores the scale of the challenge that remains. Pandemic aid programs moved unprecedented sums of money into the economy at record speed, a necessity at the time but one that created fertile ground for fraud and administrative gaps.
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