Massive fraud is quietly draining the U.S. government’s coffers—and it’s not just a few bad actors. According to the U.S. Government Accountability Office (GAO), international crime rings are siphoning off between $233 billion and $521 billion each year. That’s a staggering loss, equivalent to the GDP of countries like Hungary or Qatar. Despite growing political divides, this level of fraud may be one of the few areas where bipartisan action could deliver huge savings.
Government Programs Treated Like ATMs
During the COVID-19 pandemic, fraud levels exploded as emergency aid programs rolled out. Yet even now, years later, the problem hasn’t been reined in. Jordan Burris, head of public sector strategy at identity verification firm Socure, believes the government still lacks a full picture of the fraud it faces. He describes the situation plainly: international crime syndicates see federal programs as easy targets—digital ATMs ready for looting.
One major reason? Our data is everywhere. After countless data breaches, personal information like Social Security numbers, addresses, and birthdates are floating around on the dark web. Criminals use this to game outdated ID checks. Many federal and state agencies still ask users to confirm identity using old methods like address history or SSNs—methods that attackers can easily spoof.
According to Socure, about 80% of fraud cases involve real Americans. Scammers submit benefit applications using real PII but link it to fake contact details. In more sophisticated cases, they build synthetic identities—combinations of real and fake data that trick the system. These fake profiles often follow patterns, like using odd email addresses or SSNs that don’t match a person’s supposed birth year.
But fraudsters don’t stop at one agency. Roughly one in four fraud attempts is repeated across different departments. Some attackers strike fast, hitting several programs in a day. Others act slowly, targeting one agency at a time to stay under the radar.
Billions Lost, But Solutions Exist
The pandemic offered a lesson in what happens when fraud controls fall short. Over $4 trillion was spent to keep the economy afloat, yet a significant chunk vanished into the hands of scammers. Despite this, few systemic upgrades have been made since. Burris warns that with the rise of artificial intelligence, attacks are only getting more sophisticated—and more scalable.
What’s the answer? Not longer forms or extra paperwork. Burris argues that the system should detect fraud automatically, using tools that already exist. For example, if someone claims aid in California but applies from an IP address in Russia using a throwaway email address—why does that request get through?
Modern identity verification technology can flag these inconsistencies in real-time. Yet many agencies haven’t adopted it. Until they do, taxpayers will continue to fund criminal networks that may be supporting everything from organized crime to human trafficking.
As Burris puts it, every dollar stolen from the U.S. public ends up funding something far more sinister abroad.
