The U.S. Department of Labor and its Office of Inspector General announced the recovery of $512,138,478 in fraudulent CARES Act unemployment insurance funds returned to the U.S. Treasury.
This marks the second major recovery from Maryland, bringing the total recovered from that state to more than $1 billion. Acting U.S. Secretary of Labor Keith Sonderling simultaneously sent formal letters to the governors of all 53 states and territories demanding immediate action to combat fraud, waste, and abuse in the unemployment insurance program.
Note: The reference to “53 states and territories” reflects the jurisdictions that administer their own unemployment insurance programs under federal oversight. This includes the 50 U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
“Under the direction of President Donald Trump, we’ll continue doubling down on our efforts to root out waste, fraud, and abuse to put the American Worker First,” officials stated in connection with the announcement.
The recovered funds stem from pandemic-era unemployment claims. The Department of Labor Inspector General has long highlighted widespread fraud vulnerabilities in the programs expanded during the COVID-19 crisis.
Acting Secretary Sonderling’s letters to governors stress the need for stronger verification, updated technology, and accountability, warning that states could face consequences including loss of administrative funding if they fail to act. Examples cited include ongoing issues in states with high improper payment rates.
Earlier recoveries and enforcement actions have already returned billions in misused funds to the Treasury. Officials noted that the latest $512 million recovery demonstrates progress but emphasized that significant work remains to address vulnerabilities exposed during the pandemic.
The Department of Labor will continue to collaborate with state agencies and the Inspector General to pursue additional recoveries and implement safeguards to ensure that benefits reach only eligible recipients.
