SHOCK: ‘Half’ Of COVID-19 Unemployment Funds May Have Gone To Scammers
Application for benefits
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According to a new report from Axios, as much as half of all unemployment benefits — around $400 billion — doled out during the COVID-19 pandemic may have been lost to scams and fraud.

Unemployment fraud peaked during the pandemic, the outlet said Thursday, and nearly 50% of the money earmarked to help individuals survive during the economic downturn may have gone to scammers who took the money and funneled it, in most cases, out of the country.

“Unemployment fraud during the pandemic could easily reach $400 billion, according to some estimates, and the bulk of the money likely ended in the hands of foreign crime syndicates — making this not just theft, but a matter of national security,” Axios said.

“Blake Hall, CEO of, a service that tries to prevent this kind of fraud, tells Axios that America has lost more than $400 billion to fraudulent claims,” the outlet noted. “As much as 50% of all unemployment monies might have been stolen, he says.”

According to experts, up to 70% of the money stolen “likely left the country,” flowing to criminal syndicates based in China, Nigeria, Russia, and other hostile nations. The rest was likely “stolen by street gangs domestically, who have made up a greater share of the fraudsters in recent months.”

Some outlets have been tracking COVID-19 unemployment fraud since the beginning of the pandemic — and in some cases recording staggering losses — but the latest numbers may still come as a shock, given that they suggest that nearly half of all unemployment doled out at the state and federal levels fell into the wrong hands.

The $400 billion number is four times what Labor Department officials expected in February when sources spoke to NBC News.

“The Labor Department inspector general has yet to complete a full investigation but, based on previous programs, estimates at least $63 billion of the $630 billion in disbursements has been misspent. The full scope of the loss in taxpayer funds is likely many times higher, experts and officials say, soaring well beyond $100 billion,” that outlet reported, according to The Daily Wire.

The key element that gave way to fraud, NBC News noted, was the speed at which checks were issued. “A rush to release the funds put enormous strain on state workforce agencies, creating a bonanza for individual scam artists and international cybercrime rings,” NBC said. “And the federal government was slow to act despite early red flags, according to interviews with more than two dozen fraud experts, senior law enforcement officials and state and federal officials.”

The Justice Department now has a task force assigned to rooting out fraud in all 50 states, but the effort may be too little too late. In California alone, errors and scams that awarded unemployment benefits to prisoners likely cost that state’s taxpayers close to $1 billion.

“So far, investigations have uncovered more than $400,000 in state benefits paid to death row inmates, and more than $140 million to other incarcerated people in California’s 38 prisons, according to Sacramento County Dist. Atty. Anne Marie Schubert, who helped organize and lead a task force that uncovered the alleged dupery,” per the L.A. Times. “In total, payments to those ineligible due to incarceration in prisons and jails could total nearly $1 billion, the prosecutors claim.”

California is reportedly one of the few states to launch its own review and investigation of COVID-19 relief programs. According to NBC News, officials in California “said they have tallied $11 billion stolen from taxpayers so far, but the total figure could be as high as $30 billion, or 27 percent.” In Nebraska, matters are even worse, with early reviews which looked at statewide payments through June finding “roughly 66 percent of unemployment money was misspent.”

The loss to taxpayers, NBC added, is “staggering.”

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