Crime Rings Using Stolen Identities to Steal Money from U.S. Government

The Trump administration has made fraud a buzzword in Washington and tasked the Department of Government Efficiency, or DOGE, with eliminating it from the federal government. But the government's fraud problem is much more complex and costly than most realize, according to Linda Miller, who spent a decade at the Government Accountability Office and wrote the rulebook on preventing fraud in federal programs.

Fraud is a crime, and Miller believes the cost to taxpayers is coming close to $1 trillion each year. She said the biggest perpetrators aren't individuals lying about their eligibility for programs like unemployment insurance – they are sophisticated criminals, often overseas, who are draining public assistance programs intended for Americans in need.

"What we're really talking about is nation-state actors," Miller said. "We're talking about organized crime rings. We're talking about using vast amounts of stolen Americans' identities to monetize them for criminal activity."

The threat from transnational fraud rings The problem exploded during the COVID-19 pandemic, when the government rushed trillions of dollars into the economy to help struggling Americans. Applications for relief programs moved online, making it easier for people to access aid but with few safeguards, scammers, hackers and organized crime rings also cashed in.

Miller, who in 2020 was appointed to an independent watchdog committee that tracked how COVID relief money was spent, said she saw the theft coming. "It was like they threw a big ol' party and invited everybody," Miller said. "They left the champagne glasses out, and now we're paying for it."

Last year, the GAO released a report estimating that the federal government loses as much as $521 billion a year to fraud. But Miller and other fraud experts believe the number is higher. Miller puts the number between $550-$750 billion a year.

Miller said there are a lot of opportunities for DOGE to save significant money, if they focus on real fraud – which she defines as willful deception that can be proved in a court of law. "This is mom and apple pie stuff. We all agree that bad actors should not be stealing American taxpayer dollars,"

DOGE claims it has saved taxpayers more than $150 billion so far, sometimes citing examples of cost cuts that are inaccurate and later walked back. A White House spokesman told 60 Minutes that DOGE has been working on improving data sharing between agencies and that departments are collaborating to identify fraud and prevent criminals from exploiting taxpayers, saying, "fraudsters will be held accountable."

Miller said she sees "some hints" that DOGE is addressing the right issues. "But right now, I think the jury is still out on whether or not we're gonna get that kind of progress,"

Victims of Identity Fraud Struggle to Access Benefits

Rich and Deann Wilken, who survived the Los Angeles wildfires in January, are among those who are victims of suspected identity fraud. They documented the destruction to their home of nearly five decades and applied for disaster assistance from the Federal Emergency Management Agency.

The Wilkens never heard back, so they followed up with a FEMA representative at a disaster center and learned the personal information they'd used to set up their FEMA account had been changed. "By that time, too, we had already had some of our other friends whose accounts were the same way," Deann Wilken said.

Deann Wilken is still waiting for answers about her family's experience. "We just go, 'Oh not us too,'" she said. The Wilkens' case highlights the need to strengthen protections against identity fraud and ensure that those who are most vulnerable – like seniors and low-income families – have access to the benefits they deserve.