James Comer's new bills could curb federal fraud in Minnesota and California

FIRST ON FOX: House Republicans say they’re ready to advance legislation that would crack down on widespread fraud in states like Minnesota and California.

House Oversight Committee Chairman James Comer, R-Ky., introduced legislation on Thursday that would tackle fraud in federal programs by curbing premature disbursement to "high-risk" recipients, Fox News Digital has learned. 

His panel will mark up the two bills — the Stopping Fraudulent Payments Act and the Pre-Payment Fraud Prevention and Treasury Data Access Act — as soon as next Wednesday, a House Oversight Committee spokesperson told Fox News Digital.

"Americans are fed up with this abuse and expect action from the government entrusted with their money," Comer said in a statement. "These long-overdue integrity measures will strengthen the federal payment system, and I look forward to advancing these bills next week at the Oversight Committee’s markup."

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Comer’s fraud prevention push comes after the oversight panel launched sweeping investigations into state-administered social services programs in Minnesota and California. 

The committee rolled out an interim report in March that found Gov. Tim Walz, D-Minn., and Minnesota Attorney General Keith Ellison knew for years that their state's federally-funded welfare programs were rife with fraud, but alleges they ignored whistleblowers' concerns when they attempted to bring up the problem.

Fraudsters could have stolen at least $9 billion from Minnesota’s welfare programs, according to Comer’s probe. Federal prosecutors have charged at least 92 individuals in connection to the fraud schemes, most of whom are of Somali descent, and secured more than 60 convictions so far.

The oversight panel also opened an investigation into "rampant taxpayer fraud" in California’s hospice programs in March. 

Comer’s legislation would seek to better protect taxpayer dollars upfront by stopping "pay and chase" practices, which some fraudsters use as a way to go under the radar since fraud is only discovered after the benefits have been paid out.

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If the Kentucky Republican's bills are enacted, federal agencies would be barred from sending out disbursements if they determine that the recipient is at "an elevated risk of fraud," or the transfer is suspected to be an improper payment.

The legislation would also direct the Treasury Department to verify payments and recipient information to catch fraudulent disbursements prior to being issued. Treasury would also be equipped with new authority to block payment requests from federal agencies if it suspects fraud.

Sheila Clark, the CEO of a hospice advocacy group, told House lawmakers Wednesday that fraud is pervasive among some providers in the state. 

"You'd be amazed at how many hospices… the door you can walk up to in California and there is nobody there," Clark said at a House Ways and Means Committee hearing, adding there are "months' worth of mail that you can see stacked."

"And that passed a survey. How did that happen?" she questioned.

"How do you put a hospice in a burrito stand in California?" Clark went on, likely referencing a specific incident she encountered. "How do you put a hospice in an entire store in California? That all had to be vetted through licensure and through certification and accreditation."

House Budget Committee Chairman Jodey Arrington, R-Texas, voiced support for Comer's plans for fraud prevention legislation.

"Instead of hunting down stolen money after the fact, these bills prevent improper payments and fraud from happening in the first place," Arrington, who is a cosponsor of the two bills, told Fox News Digital.

"If we’re serious about restoring fiscal sanity to Washington, we must get serious about eliminating waste, fraud, and abuse wherever they exist," she added.