U.S. Taxpayers Risk Losing Nearly $1 Billion in Unclaimed Pandemic Benefits

The Labor Department’s Office of Inspector General (OIG) has determined that nearly $1 billion in unused COVID-era unemployment benefits could be subject to fraud, according to a statement from the agency.

Inspector General Anthony D’Esposito warned that without swift action, U.S. taxpayers risk losing approximately $1 billion in fraudulently obtained benefits. The OIG found that $720 million of unemployment insurance benefits remain on prepaid debit cards, with an additional $192 million transferred to state unclaimed property offices.

“This is taxpayer money and it demands immediate attention,” D’Esposito said. “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 noted that one prepaid card alone holds about $76,000. Residents in most states receive unemployment benefits via such cards, which do not require bank accounts or financial information submission to the government.

D’Esposito’s team urged the Labor Department’s Employment and Training Administration to send guidance to state officials on recovering the funds. “Fraud isn’t a victimless crime,” D’Esposito, a former GOP congressman, stated. “Every dollar stolen is a dollar that families don’t have for groceries, rent, healthcare, or gas.”

The OIG’s analysis of approximately 6.5 million prepaid debit cards used during the pandemic led to these findings. To date, the agency has recovered $2.2 billion in funds, charged 2,300 individuals, and secured 1,800 convictions. Last year, the Small Business Administration reported disbursing up to $200 billion in “potentially fraudulent loans” through its pandemic relief programs.

By Sandy Fitzgerald | Tuesday, 17 February 2026 10:56 AM EST