Rep. Walorski: Billions Lost to Unemployment Insurance Fraud at Stake, So Why Won't Democrats Act?

WASHINGTON, Feb. 22 -- Rep. Jackie Walorski, R-Indiana, Republican leader of the House Ways and Means Subcommittee on Worker and Family Support, issued the following news release:

"There is too much at stake for us not to act," said Republican Leader of the Ways and Means Worker and Family Support Subcommittee Rep. Jackie Walorski (R-IN), emphasizing that Congress has a duty to investigate the billions of taxpayer dollars lost to unemployment fraud and ignored by Democrats.

Rep. Walorski said:

"Generous benefits and loose rules also made unemployment a lucrative target for both domestic and international fraudsters.

"The White House recently estimated a 19 percent improper payment rate in the Federal-State UI program, equating to nearly $80 billion in lost funds in the fiscal year 2021 alone. This is only a partial estimate.

"Democrats simply aren't interested in fulfilling their responsibility to investigate fraud in federal programs.

"Republicans strongly believe this Committee has a duty to hold oversight hearings to determine the amount of fraud in pandemic unemployment programs, including preventing further abuse and pursuing recovery of taxpayer dollars."

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Rep. Walorski's full remarks as prepared for delivery appear below.

Thank you, Chairman Brady.

Good morning and welcome. I'm Jackie Walorski from Indiana's 2nd district. Thank you to my colleagues and our experts for joining us today for this discussion.

We appreciate your participation in this roundtable to examine the magnitude of fraud in COVID unemployment programs.

As Ranking Member of the Worker and Family Support Subcommittee, it is our Subcommittee's responsibility to ensure the integrity and success of the programs we oversee.

The expanded unemployment benefits initially put in place by the CARES Act increased weekly unemployment benefits by $600 and $300 and created a new unemployment program that allowed gig workers and independent contractors to claim benefits.

The extension of these programs by the so- called "American Rescue Plan" discouraged work and made it increasingly difficult for employers to hire - so much so that more than 20 states acted on their own to end the expanded benefits early.

Generous benefits and loose rules also made unemployment a lucrative target for both domestic and international fraudsters.

The White House recently estimated a 19 percent improper payment rate in the Federal-State UI program, equating to nearly $80 billion in lost funds in the fiscal year 2021 alone. This is only a partial estimate.

The truth is we don't know the size and scope of unemployment fraud, or the full extent of federal law enforcement officers' efforts to prosecute and recover funds.

Democrats simply aren't interested in fulfilling their responsibility to investigate fraud in federal programs.

Republicans strongly believe this Committee has a duty to hold oversight hearings to determine the amount of fraud in pandemic unemployment programs, including preventing further abuse and pursuing recovery of taxpayer dollars.

Today, we sent a letter to our Democratic colleagues requesting an immediate oversight hearing on UI fraud. We sent a similar letter last March and received no response.

In the absence of action from Democrats, today Committee Republicans are holding our second roundtable to hear directly from federal agencies investigating the size, scope, and severity of fraud.

In my home state of Indiana, since the beginning of COVID, our state's Department of Workforce Development has processed nearly 1.7 million claims for unemployment, and as high as 15 percent of those have been flagged for fraud indicators.

As far back as last summer, multiple reports from the Department of Justice, the U.S. Secret Service, and GAO raised the alarm bells about widespread fraud resulting in billions being diverted. Criminal organizations, including international cybercrime rings, prison inmates, and opportunistic foreign actors, use stolen identities to claim unemployment benefits.

With new reports of fraud surfacing daily, there is too much at stake for us not to act. In the absence of leadership from the Majority, we will continue to highlight and investigate pandemic unemployment fraud to provide the transparency and government accountability that American taxpayers deserve.

With that, I would like to introduce our guests.

Joining us today is Seto Bagdoyan director for audit services in the US Government Accountability Office's Forensic Audits and Investigative Service mission team. Mr. Bagdoyan leads audits of major federal programs focusing on a range of program-integrity issues. During his GAO career, Mr. Bagdoyan has served in a variety of positions, including as legislative advisor in GAO's Office of Congressional Relations and as assistant director for homeland security.

We are also joined by Tye Gillins, the National Program Manager for Investigations at the Pandemic Response Accountability Committee since April 2021. His professional experience includes more than 26 years of federal law enforcement as a federal agent and manager with the United States Postal Inspection Service and the U.S. Department of Homeland Security, where he led complex criminal and administrative investigations.

We are joined by two representatives from the U.S. Secret Service in the Department of Homeland Security.

Acting Special Agent in Charge Roy Dotson has been in law enforcement for 30 years with 19 years dedicated to the Secret Service. He started his career in the Orlando Field Office, moved on to multiple Headquarters assignments in Washington, DC, and is currently in the Jacksonville Field Office as the supervisor of criminal investigations and the North Florida Cyber Fraud Task Force. Mr. Dotson was recently designated the Service's National Pandemic Fraud Recovery Coordinator. His criminal investigations have been successful in numerous convictions and the recovery of over $4 billion in illicit assets.

Deputy Special Agent, Kyo Dolan has been with the U.S. Secret Service for 19 years. She has directed surge force collaboration missions with Intelligence Community and Federal partners in direct support of cyber protective operations for Presidential and Vice Presidential visits and National Special Security Events. During her tenure, she has worked to enhance the four pillars encompassing the Secret Service's comprehensive cyber mission - protection, investigations, intelligence, and policy.

Finally, I would like to turn to my colleague from Missouri, Mr. Smith to introduce his guest, Missouri State Senator Andrew Koenig.

Thank you to our guests again for joining us today and for your leadership and tireless work on this important issue.

Following their remarks, I will turn to each of my colleagues. In order to make sure everyone has a chance to participate, I'm asking that remarks be limited to five minutes.

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CLICK HERE (https://www.youtube.com/watch?v=voCjLtoYl8M) to watch the full meeting.

CLICK HERE (https://www.youtube.com/watch?v=voCjLtoYl8M) to watch Rep. Walorski's full remarks.

READ: Brady: Dems Ignore Unchecked UI Fraud and Thousands of American Taxpayer Victims (https://gop-waysandmeans.house.gov/brady-dems-ignore-unchecked-ui-fraud-and-thousands-of-american-taxpayer-victims/)