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The anti-fraud proposal includes funds to modernize state governments’ benefits systems, identity verification and data analytics capabilities.
State governments are poised to receive additional funds to bolster technical efforts for fraud detection and prevention that surfaced during the pandemic.
The Biden administration introduced a $1.6 billion anti-fraud proposal Thursday that aims to beef up federal and state agencies’ investigative resources and data management capabilities to better identify fraudulent activity within public benefits programs, according to a White House fact sheet.
The proposal includes $600 million in funds to support oversight and law enforcement agencies’ fraud investigation and prosecution efforts, according to the fact sheet. This includes extending a multistate agreement with the Department of Labor Office of Inspector General in which states receive grants to modernize unemployment insurance systems if they provide the DOL OIG with data to investigate UI fraud. The agreement was slated to expire in December 2023 but will continue until 2025, the fact sheet stated.
Another $600 million targets identity theft. The pandemic brought to light criminal syndicates on the darknet that sell individuals’ identifiable information such as their Social Security numbers for bad actors to use in fraudulent benefits applications. For example, one Los Angeles man was able to claim about $5.5 million in jobless benefits using the stolen identities of California state prisoners before his arrest in March 2021.
Biden also proposed establishing a data analytics platform modeled after the Pandemic Response Accountability Committee’s Pandemic Analytics Center of Excellence, which provides inspectors general analytic, audit and investigative support, the fact sheet stated. A new and permanent analytics system will help officials oversee future disaster relief and emergencies “to prevent fraud from taking place in the first place.”
To further squash identity theft, the anti-fraud proposal noted that $1.6 billion of American Rescue Plan grants to modernize, improve access and prevent fraud and identity theft would be available to states by June 2023.
This includes modernizing and automating agencies’ IT systems to reduce erroneous payments and processing mistakes and enable faster responses to fraud, according to the fact sheet. For instance, agencies will undergo website enhancements including translation and plain language features that enable “applicants to better understand program requirements and [provide] more accurate information, ultimately decreasing improper payments,” the fact sheet stated.
The March 2 proposal includes $400 million in new funding to help victims of identity theft. For instance, a portion of the funds will go toward piloting an identity theft warning system for individuals and entities that receive government benefits.
The White House suggested the General Services Administration should collaborate with agencies to create a system that notifies people or organizations when their information is being verified to access public benefits programs, according to the fact sheet. This will allow potential victims to stop suspicious transactions and report such incidents to law enforcement, the fact sheet stated.
“We must empower law enforcement to pursue, investigate, prosecute, and recover money from those who were engaged in major or sophisticated fraud—from well-off individuals who took hundreds of thousands, if not millions, of dollars from taxpayers to sophisticated criminal syndicates engaging in systemic identity theft,” the fact sheet stated.