U.S. Sens. Marsha Blackburn (R-TN) and Mike Crapo (R-ID) have joined 13 Senate colleagues to introduce a bill that would aid in recovering funds lost to unemployment insurance (UI) fraud.
The Protecting Taxpayers and Victims of Unemployment Fraud Act would also provide incentives for states to recover fraudulent payments, ensuring aggressive identification, investigation and prosecution of criminal fraud in pandemic unemployment programs.
“Unemployment insurance fraud during the pandemic was widespread and unacceptable, and taxpayers footed the bill,” Blackburn said. “Those who broke the law in receiving these payments must be identified and held accountable. The Protecting Taxpayers and Victims of Unemployment Fraud Act will empower state governments to find and prosecute those who committed fraud, recover the stolen funds and help prevent unemployment insurance fraud on this scale from happening again.”
The lawmakers said just over $5 billion of an estimated $191 billion in fraudulently obtained unemployment insurance funds has been recovered.
“Improper payments in pandemic unemployment programs left taxpayers on the hook for hundreds of billions of dollars,” Crapo, Finance Committee ranking member, said. “This legislation will help gain restitution for victims of fraud and theft by jumpstarting efforts to claw back federal funds and recover fraudulent payments.”
Bill provisions include allowing states to keep 25 percent of recovered fraudulent overpayments of federal funds; enabling states to use recovered funds to improve program integrity and fraud prevention; allowing states to keep 5 percent of state UI overpayments, conditioned on meeting data matching integrity conditions and dedicating those funds to preventing future fraud; and extending the statute of limitations for criminal charges or civil actions from five to 10 years.