Reps. Van Duyne and Suozzi introduce the Recover COVID Unemployment Fraud in Banks Act to recoup nearly $1B in frozen Unemployment Insurance (UI) funds

Washington, D.C. - Reps. Van Duyne (R-TX-24) and Suozzi (D-NY-3) introduced H.R. 8873, the Recover COVID Unemployment Fraud in Banks Act to provide a pathway for banks to return frozen funds to state workforce agencies and to report to Congress on the status of the recovery of those funds. A recent investigation by the Department of Labor Inspector General (DOL-OIG) found nearly $1 billion in COVID-era UI funds tied to fraud being held by financial institutions. Some of these accounts have been left "forgotten" by state workforce agencies, unreconciled, and in some cases transferred by banks to state unclaimed property due to inactivity. Without Congressional action, hundreds of millions in funds may go unclovered.

The Recover COVID Unemployment Fraud in Banks Act establishes a federal taskforce, led by a National Recovery Coordinator, to coordinate with applicable state agencies to identify federal pandemic UI payments issued on prepaid debit cards held by financial institutions or transferred to state agencies responsible for unclaimed property. Requires the taskforce to develop model processes that facilitate cost-effective recovery of payments and return them to the federal government. Also extends the statute of limitations for criminal prosecution and civil enforcement actions in pandemic unemployment programs from 5 to 10 years to provide law enforcement agencies more time to hold fraudsters accountable.

"During a time of an unprecedented pandemic, Congress worked tirelessly to support and stabilize tens of millions of Americans affected by businesses being shut down and job losses. Fraudsters exploited that moment of crisis to steal hundreds of millions of dollars from the American people and commit rampant identity theft" said Congresswoman Van Duyne. "The Recover COVID Unemployment Fraud in Banks Act is a bipartisan solution to help recover these funds by providing a pathway to return funds to the federal government. It is not too late - but Congress must act swiftly to prevent hundreds of millions of taxpayer dollars from going unrecovered and ensure fraudsters are held accountable before they harm more Americans."

"We need to root out waste, fraud, and abuse at every level of our government. Members of Congress have a duty to protect victims of fraud and identity theft, who are most often senior citizens, and make sure bad actors don't get away with preying on them," said Congressman Suozzi. "This bipartisan bill is a great step forward in helping recover stolen funds, strengthening protections for victims, and providing stronger tools for states and financial institutions to crack down on fraud before more Americans are harmed."

The Recover COVID Unemployment Fraud in Banks Act is supported by Strategic Services on Unemployment & Workers Compensation (UWC), the US Chamber of Commerce, the Taxpayers Protection Alliance, and the National Association of State Workforce Agencies.

Click HERE for full bill text.

Background

• The Department of Labor Inspector General (DOL-OIG) recently found nearly $1 billion in unspent COVID-19 unemployment insurance (UI) funds frozen and held by financial institutions across the country due to fraud.
• Funds were identified on millions of prepaid debit cards issued by states to distribute supplemental federal UI benefits during the pandemic.
• More than six years after the pandemic, these accounts have been left "forgotten" by state workforce agencies, unreconciled, and in some cases transferred by banks to state unclaimed property due to inactivity, complicating recovery efforts.
• Without Congressional action, hundreds of millions in taxpayer dollars may go unrecovered.
• In addition, the statute of limitations for prosecuting pandemic UI fraud began to expire in March of 2025; an extension is needed to provide more time for federal agencies to prosecute fraudsters and recover taxpayer dollars.

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