Federal watchdog officials are asking Congress to extend the statute of limitations to prosecute COVID-19 pandemic-era unemployment fraud cases.
“In many cases, the statute of limitations will expire sooner than that,” Turner added.
The statute of limitations for mail and wire fraud is generally about five years, though the statutes extend to about 10 years for mail and wire fraud that affects a financial institution.
“Extending the statute of limitations for fraud associated with pandemic-related UI programs will help ensure investigators and prosecutors have time to effectively pursue and hold accountable those groups and individuals that targeted and defrauded the program, and that they do not escape justice,” Horowitz added.
Turner said his department lacks the resources to review and investigate the 162,000 open complaints of Unemployment Insurance (UI) fraud, that they have received since the pandemic hit, before the statute of limitations runs out.
Fraud Estimates Growing
One factor that could contribute to the DOL’s calls for an expanded statute of limitations is the fact that they’ve made higher fraud loss estimates as they’ve continued to receive and investigate complaints.The DOL previously estimated that out of $872.5 billion in federal pandemic UI funding, 18.7 percent or at least $163 billion in pandemic UI payments could have been improper, “with a significant portion attributable to fraud.” In his testimony before the House committee, Turner said the DOL’s latest estimate found that $888 billion had been paid out in pandemic-era UI benefits, of which 21.5 percent or at least $191 billion could have been improper.
Turner said improper UI payments could be even higher than the DOL’s latest 21.5 percent estimate because the department is still waiting on data from the Pandemic Unemployment Assistance (PUA) program.
The DOL has charged more than 1,200 individuals with UI fraud-related crimes, of which it has achieved more than 500 convictions. The department has secured 11,000 months of total incarceration sentences and recovered $905 million in funds. Turner said his agency has referred another 23,000 fraud cases that did not meet federal prosecution guidelines over to the states for further action.
Fraud Prevention Lacking
Government Accountability Office (GAO) Comptroller General Gene Dodaro told the House Committee that the DOL “needs to address substantial pandemic UI fraud and reduce persistent risks.”Dodaro said, in a prepared statement for the hearing, that the GAO has 19 open recommendations for the DOL, including eight to specifically identify and mitigate risks for potential fraud. Dodaro said the DOL’s work so far in implementing these recommendations has been incomplete.
“While DOL has taken steps to address UI fraud risks, its approach has not been strategically organized and targeted at prioritized risks,” Dodaro said. “Specifically, we found that it has not designed and implemented an antifraud strategy to guide its actions based on a fraud risk profile in alignment with leading practices in our Fraud Risk Framework.”