‘Bad actors’: Senator reveals unemployment scams in blue states have cost $100,000,000,000

Republican Oklahoma Sen. James Lankford is introducing a bill Thursday aimed at eradicating fraud from unemployment programs, particularly in blue states.

Lankford is introducing The Stop Unemployment Fraud Act to reform the joint federal-state Unemployment Insurance (UI) program following the hundreds of billions in fraudulent unemployment payments made during the height of the layoffs during the COVID-19 pandemic. The bill would strengthen the program and ensure only those eligible and in need would be able to benefit from the system.

“Making the government more efficient isn’t a partisan issue, it’s an American issue,” Lankford told the Daily Caller News Foundation in a statement.

The bill would make UI applicants verify their identity and would only allow UI payments once eligibility is determined, requiring states to use the Integrity Data Hub — a fraud alert center — to crossmatch unemployment claimants. It will also strengthen work search requirements and direct the Department of Labor to monitor state compliance with work requirements.

The bill would also incentivize states to recover improper payments from the COVID-19 pandemic.

Republican Pennsylvania Rep. Lloyd Smucker, who has long called for UI reform, is introducing the legislation in the House. Twelve Republican lawmakers are cosponsoring the legislation in the lower chamber, and Republican Sens. Mike Crapo of Idaho, Bill Cassidy of Louisiana and Steve Daines of Montana are cosponsoring it in the Senate.

“Bad actors stole more than $100 billion in pandemic-era unemployment benefits, and recent discoveries in Minnesota illustrate that vulnerabilities in the unemployment system continue to persist,” Smucker told the DCNF in a statement.

Smucker and Lankford have worked together to bring attention to fraud cases in the past as well. The two lawmakers sent a letter to Labor Secretary Lori Chavez DeRemer in March 2025 to “take swift action to address the failures of the Biden administration that have undermined the nation’s unemployment insurance system.”

“During COVID, fraudsters exploited loopholes in the unemployment system and stole billions while taxpayers were left with the bill,” Lankford said. “This legislation strengthens verification, improves coordination between states, and ensures benefits go to the Americans who actually qualify, not criminals exploiting the system.”

Lankford, who serves as the Vice Chair of the Senate Republican conference, has championed ridding waste, fraud and abuse. In 2024 he championed the Taxpayers Right-to-Know Act which led to the launch of the Federal Program Inventory that allows the American people to see how their tax dollars are being spent.

Maryland is currently facing scrutiny for a pandemic-era unemployment fraud case in which $760 million was overpaid with up to $1.3 billion potentially sent out incorrectly. Over 180,000 repayment notices were sent out, with many recipients claiming they were victims of identity theft.

A 2025 audit also highlighted California, New York and Massachusetts for making $305 million in improper claims. The audit further singled out California for paying benefits to ineligible recipients. Republican California Rep. Young Kim pointed to $32 million in unemployment fraud throughout the state during a February hearing with Treasury Secretary Scott Bessent.

President Donald Trump announced a “war on fraud” during his State of the Union address and appointed Vice President JD Vance to lead the charge, kicking off momentum to tackle the issue nationwide.

“Congress bears ultimate responsibility for protecting taxpayer dollars,” Smucker said. “The Stop Unemployment Fraud Act will help states recover stolen funds and strengthen safeguards to ensure the long-term integrity of this program.”

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