Why Americans are going hungry while government fraudsters get rich

In the State of the Union address, President Biden announced a major crackdown on public-sector fraud, claiming that every dollar invested in fraud prevention will yield tenfold returns for the American people. With this newfound commitment to stopping fraudsters, it’s imperative that the government models the best-practices of the private sector, rather than attempting to reinvent the wheel — which they have done time and time again to no avail.

Our largest and most vital public government programs — food stamps (SNAP), Medicaid, TANF, unemployment insurance and even our tax system — are being systematically plundered by domestic and transnational criminals who are intent on disrupting our way of life. I know this because for 14 years, I have been on the frontlines of securing government agencies from fraudsters, cybercriminals and adversaries. Meanwhile, I have been advocating for government programs that assist individuals in need.

The level of fraud has become so brazen that it is impossible to ignore. For instance, during the pandemic, there were instances in some states where the number of individuals applying for unemployment insurance exceeded the population of those over 18. We are facing such widespread fraud across numerous programs that we no longer feel outraged or surprised by it. Our normalization of this situation has become our Achilles heel.

The time for complacency has come to an end. 

Each week, thousands of America’s most vulnerable citizens go to the grocery store only to get to the counter and find that their electronic benefit transfer (EBT) card has been drained. Can you imagine the fear and devastation they experience when they find that their lifeline — a government benefit that prevents them from going hungry — has been stolen? Can you imagine not being able to eat? Can you imagine spending days or weeks working through the bureaucratic nightmare of trying to restore your benefits, just to have them stolen again next month?

Fraud is not only a problem for taxpayers and the federal budget, but it also wreaks havoc on individuals’ lives. Despite this, our government seems to be neglecting the urgency of the situation and is not taking the necessary steps to rectify it.

While banks are using multi-factor authentication, behavioral biometrics, artificial intelligence (AI) and data-driven identity verification to prevent fraud, most government programs are barely more secure today than they were 20 years ago. In an age in which fraudsters have access to deepfakes, counterfeit IDs, AI, voice cloning technologies and anybody’s personally identifiable information via the dark web, we’re reaching a point in which this epidemic of fraud could cripple our government’s ability to function — and harm the most vulnerable Americans.

The problem of fraud and abuse in government programs is an ongoing issue, with an estimated 15 percent of agency budgets being lost each year. With the rise of advanced technologies, such as AI, being utilized by cybercriminals, this number is rapidly increasing. 

How high can fraud rates go before this threatens our government’s ability to function?

The government has become a prime target due to its outdated systems and processes, vast resources and lack of accountability for those committing these crimes. 

Unlike our government, banks do not routinely lose customers’ deposits to cybercriminals. Nor do they have tremendous friction and hoops to jump through to keep accounts secure. Banks have frictionless fraud prevention measures and the government can too. 

Despite the rampant issue of fraud in government programs, many federal and state agency leaders claim that fraud rates are at an all-time low, with some even claiming a rate of less than 1 percent. However, such a low rate is statistically impossible. The truth is that most agencies lack the proper data collection methods to accurately assess the extent of the problem.

As I was told recently by a high-level government appointee, “It’s not fraud if you don’t count it.”

Contrary to the official figures that suggest fraud is not a major concern, the evidence found on social media and the dark web, as well as results from actual audits, paint a completely different picture. Working with criminologist David Maimon from Georgia State University, I have infiltrated numerous cybercriminal groups responsible for this issue. We have substantial data to share, including screenshots of fraudsters trading instruction manuals for defrauding government programs, videos of deepfakes used to bypass facial recognition systems, proof of bulk sales of Americans’ personal information to fraudsters, as well as evidence of an exponential increase in fake ID production for the purpose of defrauding U.S. entitlement programs. All of this information is available if anyone in the government is interested.

Data show the reality is this: we’re basically losing as much as half of our military budget every year to fraud. Much of it is going completely undetected and/or being ignored. 

At a time in which millions of families are struggling to get by, these fraud losses could, if stopped, pay for free childcare for every family in America. We could cut all college tuition in half. We could almosteliminate the sales tax — everywhere. Or the property tax for that matter. For the 41 million Americans who struggle with hunger and food insecurity, we could put food on the table, forever.

The losses incurred from fraud are not just numbers on a page, they have real consequences. The money lost represents hard-earned taxpayer dollars that are being diverted to international and domestic cybercriminal groups. According to law enforcement agencies, some of this money is even used to fund horrific activities such as terrorism, drug trafficking, weapons purchases, human trafficking and child sex slavery. It is imperative that we understand the opportunity cost of these losses and humanize the impact they have.

The U.S. government may inadvertently be thesingle largest source of funding to global cybercriminal groups — and we don’t even realize it.

This wasn’t just a “pandemic fraud” problem. It has metastasized and it now impacts nearly every entitlement program. 

The time has come for real congressional investigations into the systemic plundering of the U.S. government by fraudsters and cybercriminals. We need an accurate accounting of how big of an issue this really is. And we need real solutions. We need technology in place to detect fraud and more technology in place to stop it. This means AI, behavioral biometrics, multi-factor authentication and every core technology that banks use to keep their systems secure. 

Our government deals with a lot more money than any single bank — yet apparently puts forth a fraction of the effort to safeguard it. It’s time to treat this as a national emergency, because it is.  

Haywood “Woody” Talcove is CEO for LexisNexis Special Services Inc. and CEO for Government, LexisNexis Risk Solutions. LexisNexis Special Services Inc. and LexisNexis Risk Solutions sell solutions that prevent fraud in government programs, as well as other industries.