Massive Federal Fraud Revealed: $233–$521 Billion Lost Annually, Treasury Secretary Confirms, GAO Report
On 4/16/2024, the non partisan Government Accountability Office released the first government wide fraud estimate covering all federal programs, including emergency relief. The report estimates $233–$521B lost annually, or 3%–7% of federal spending. The low end totals $1.1T over 5 years, while the high end exceeds the combined 5-year budgets of Education, Labor, Transportation, Homeland Security, Agriculture, and Interior, which total $1.815T. Losses come from identity theft, fake credentials, shell companies, phantom employees, and networks exploiting verification gaps. Treasury Secretary Scott Bessent said in 4/2024 federal fraud totals “about $600B a year.” The report was available on the GAO website.
Agencies cannot verify income, jobs, or eligibility in real time, letting payments go through. Medicare and Medicaid, on GAO’s High Risk List, account for much of the fraud. Pandemic programs, including $1.9T stimulus and $600B economic support, were vulnerable as speed outpaced checks, allowing billions in improper payments.
Only 10% of confirmed losses are recovered. Indirect costs like audits and enforcement add tens of billions annually. Better detection could save tens of billions yearly, roughly equal to NASA, EPA, and NSF combined ($46B). Public awareness remained low; GAO released the report online without a press conference.
On 4/15–16/2024, pro Palestinian "Tax Day" protests blocked roads, bridges, and airports. Millions filed taxes; media focused elsewhere. On 4/17/2024, the Biden Administration issued a brief comment disputing aspects of the estimate. At the time, President Biden was the leading Democratic candidate; the report’s scale affected his campaign. On 1/10/2026, Secretary Bessent announced a plan to strengthen fraud detection and improve real time verification across federal programs.
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