Federal fraud costs taxpayers up to $521 billion annually

A report from the Foundation for Government Accountability (FGA) estimates that federal fraud could cost U.S. taxpayers as much as $521 billion annually, representing approximately 7% of total federal spending. Since 2003, improper federal payments have totaled an estimated $3 trillion.

Much of the loss is attributed to programs such as Medicaid, Medicare, food stamps, the Earned Income Tax Credit, and pandemic-era grants for concert venues. The report notes that fraud often occurs in programs that fail to rigorously verify applicant information or those that distribute large volumes of funds quickly through state and county offices.

Liesel Crocker, a senior research fellow at FGA and author of the report, highlighted a significant gap in oversight, noting that of more than 2,200 federal payment programs, only 64 are reviewed for improper payments each year. The FGA is urging Congress, federal agencies, and state governments to strengthen eligibility checks, vetting processes, and investigations to mitigate these losses.