Recover Covid Unemployment Fraud in Banks Act
Floor Speech
BREAK IN TRANSCRIPT
Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 8873) to recover unclaimed pandemic-era unemployment compensation funds held by financial institutions or escheated to State unclaimed property administrators, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 8873
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Recover COVID Unemployment Fraud in Banks Act''. SEC. 2. NATIONAL RECOVERY COORDINATOR AND TASK FORCE.
(a) In General.--
(1) Designation of national recovery coordinator.--The Secretary of Labor, in consultation with the Secretary of the Treasury, the Inspector General of the Department of Labor, and the Attorney General, shall designate an official to serve as National Recovery Coordinator to oversee and coordinate the activities and responsibilities of the task force described in paragraph (2).
(2) Task force establishment.--Not later than 30 days after the date of enactment of this Act, the National Recovery Coordinator shall convene a task force to be named the ``Recover Pandemic Unemployment Funds in Banks Task Force'' (in this section, the ``Task Force'').
(3) Members.--The Task Force shall include--
(A) the Attorney General, or their designee;
(B) the Secretary of Labor, or their designee;
(C) the Inspector General of the Department of Labor, or their designee;
(D) the Secretary of the Treasury, or their designee;
(E) the Chairman of the Federal Deposit Insurance Corporation, or their designee; and
(F) the Director of the Consumer Financial Protection Bureau, or their designee.
(b) Task Force Responsibilities.--It shall be the responsibility of the Task Force to--
(1) coordinate with applicable State agencies to identify Federal pandemic unemployment compensation payments issued on prepaid debit cards that--
(A) are held by financial institutions, and other entities identified by the Inspector General of the Department of Labor, contracted by a State agency to transfer such payments to unemployment claimants; or
(B) were transferred by such an entity to, and are currently held by, a State agency responsible for unclaimed property;
(2) coordinate with appropriate Federal agencies to develop model processes which comply with relevant Federal and State laws and result in cost-effective recovery of the payments identified under paragraph (1), including issuing guidance, in coordination with the Secretary of Labor, to administrators of State agencies responsible for administering Federal unemployment compensation payments or determining fraud in such programs, including--
(A) guidelines for--
(i) reviewing such payments and determining if such a payment was an improper payment;
(ii) determining whether cost-effective recovery of an improper payment is possible, including a threshold, or a methodology for calculating a dollar threshold, for cost- effective recovery; and
(iii) actions, consistent with State law, to be taken by the State agency if an improper payment is determined to be the result of fraud;
(B) assurances that, subject to section 303(g) of the Social Security Act (42 U.S.C. 503(g)), any action taken in relation to a determination that a payment identified under paragraph (1) is an improper payment shall be taken under State law;
(C) a model notice and information, developed in coordination with the Consumer Financial Protection Bureau, about resources available to individuals whose identity information is determined to have been fraudulently used to obtain Federal pandemic unemployment compensation;
(D) information on the legal pathways described under paragraphs (3) and (4) for recovery of payments that are improper payments held by financial institutions and agencies described in paragraph (1); and
(E) procedural requirements for State agencies to follow when funds are returned by such institutions that provides a standardized methodology to return funds to the Federal Government;
(3) issue guidance, in coordination with the Comptroller of the Currency and Chairman of the Federal Deposit Insurance Corporation, to financial institutions described in paragraph (1) that are holding payments that are improper payments that provides information on a legal pathway, consistent with banking regulations and applicable contracts with State agencies, for returning such payments to the appropriate State agency; and
(4) issue guidance, in coordination with the Secretary of Treasury, to administrators of State agencies responsible for unclaimed property on the obligations of such agencies to review and return payments described in paragraph (1)(B) to the appropriate State agency.
(c) Consultation Requirement.--In developing the guidance required to be issued under paragraphs (2), (3), and (4) of subsection (b), the Task Force shall consult with State agencies and incorporate best practices from previous attempts by any such States to recover payments determined to be improper payments from institutions described in paragraph (1)(A) of such subsection.
(d) State Administrative Costs.--The Secretary of Labor shall reimburse States for all administrative costs incurred as a result of coordination with the Task Force by reason of an agreement under section 2102, 2104, or 2107 of the CARES Act (15 U.S.C. 9201; 9203; 9205).
(e) Definitions.--Except as otherwise specified, in this section:
(1) Federal pandemic unemployment compensation.--The term ``Federal pandemic unemployment compensation'' means a payment of--
(A) pandemic unemployment assistance under section 2102(b) of the CARES Act (15 U.S.C. 9021(b));
(B) Federal Pandemic Unemployment Compensation and Mixed Earner Unemployment Compensation under section 2104(b)(1) of the CARES Act (15 U.S.C. 9023(b)(1)); and
(C) pandemic emergency unemployment compensation under section 2107(a)(2) of the CARES Act (15 U.S.C. 9025(a)(2)).
(2) Improper payment.--The term ``improper payment'' means any amount of a pandemic unemployment payment to which the individual is not entitled.
(3) State; state agency; state law.--The terms ``State'', ``State agency'', and ``State law'' have the meanings given those terms in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note). SEC. 3. EXTENSION OF THE STATUTE OF LIMITATIONS FOR PANDEMIC UNEMPLOYMENT FRAUD BY INDIVIDUALS UNDER CERTAIN UNEMPLOYMENT PROGRAMS.
(a) Pandemic Unemployment Assistance.--Section 2102 of the CARES Act (15 U.S.C. 9021) is amended--
(1) by redesignating subsection (h) as subsection (i); and
(2) by inserting after subsection (g) the following new subsection:
``(h) Statute of Limitations.--
``(1) In general.--Notwithstanding any other provision of law and subject to paragraph (2), any criminal prosecution or civil enforcement action for a violation of, or conspiracy to violate, section 371, 641, 1028A, 1029, 1341, 1343, 1344, 1349, 1956, or 1957 of title 18, United States Code, or section 3729 or 3802 of title 31, United States Code, with respect to any unemployment compensation claim funded in whole or in part by pandemic unemployment assistance under this section shall be brought not later than 10 years after the date of the violation or conspiracy.
``(2) Exception.--Paragraph (1) shall not apply with respect to a criminal prosecution or civil enforcement action if the statute of limitations applicable to such criminal prosecution or civil enforcement action expired prior to the date of enactment of the Recover COVID Unemployment Fraud in Banks Act.''.
(b) Federal Pandemic Unemployment Compensation and Mixed Earner Unemployment Compensation.--Section 2104(f) of the CARES Act (15 U.S.C. 9023(f)) is amended by adding at the end the following new paragraph:
``(5) Statute of limitations.--
``(A) In general.--Notwithstanding any other provision of law and subject to subparagraph (B), any criminal prosecution or civil enforcement action for a violation of, or conspiracy to violate, section 371, 641, 1028A, 1029, 1341, 1343, 1344, 1349, 1956, or 1957 of title 18, United States Code, or section 3729 or 3802 of title 31, United States Code, with respect to any unemployment compensation claim funded in whole or in part by Federal Pandemic Unemployment Compensation or Mixed Earner Unemployment Compensation under this section shall be brought not later than 10 years after the date of the violation or conspiracy.
``(B) Exception.--Subparagraph (A) shall not apply with respect to a criminal prosecution or civil enforcement action if the statute of limitations applicable to such criminal prosecution or civil enforcement action expired prior to the date of enactment of the Recover COVID Unemployment Fraud in Banks Act.''.
(c) Pandemic Emergency Unemployment Compensation.--Section 2107(e) of the CARES Act (15 U.S.C. 9025(e)) is amended by adding at the end the following new paragraph:
``(5) Statute of limitations.--
``(A) In general.--Notwithstanding any other provision of law and subject to subparagraph (B), any criminal prosecution or civil enforcement action for a violation of, or conspiracy to violate, section 371, 641, 1028A, 1029, 1341, 1343, 1344, 1349, 1956, or 1957 of title 18, United States Code, or section 3729 or 3802 of title 31, United States Code, with respect to any unemployment compensation claim funded in whole or in part by Pandemic Emergency Unemployment Compensation under this section shall be brought not later than 10 years after the date of the violation or conspiracy.
``(B) Exception.--Subparagraph (A) shall not apply with respect to a criminal prosecution or civil enforcement action if the statute of limitations applicable to such criminal prosecution or civil enforcement action expired prior to the date of enactment of the Recover COVID Unemployment Fraud in Banks Act.''.
(d) Effective Date.--The amendments made by section Act shall take effect on the date of enactment of this Act.
Mr. Speaker, I rise in support of the Recover COVID Unemployment Fraud in Banks Act led by my Ways and Means colleagues Representative Beth Van Duyne and Representative Tom Suozzi.
As the lead sponsor of this legislation, Representative Van Duyne has been shining a spotlight on the fraud epidemic, even from her earliest days serving on the Ways and Means Committee.
Unemployment insurance benefits are a target-rich environment for fraudsters.
According to the Government Accountability Office, between $100 billion to $135 billion in COVID-era unemployment benefits are estimated to have been taken by fraudsters using eligibility loopholes and stolen identities.
Of that money, a Department of Labor Inspector General investigation found that nearly $1 billion of fraudulent COVID-era unemployment benefits is currently frozen and being held in financial institutions across the country. At one financial institution, the highest balance on a single card is $76,000. At a second financial institution, it is $56,000.
The statute of limitations for prosecuting COVID-era unemployment insurance fraud has already begun to expire, limiting the amount of money law enforcement can return or the number of criminals that they can bring to justice. Time is of the essence to recover the money stolen and rightfully owed to taxpayers.
This bipartisan bill establishes a new Federal task force to work with States to return the fraudulent unemployment benefits sitting in banks to American taxpayers.
The task force will develop model processes and guidance necessary for States to reclaim funds in a cost-efficient way, issue guidance to financial institutions on the legal path for returning funds, and establish due process protections for claimants whose identity was stolen as part of the crime.
Additionally, the bill doubles the statute of limitations for COVID- era unemployment insurance fraud prosecution from 5 to 10 years. As of last year, the Department of Labor reported more than 150,000 open complaints, and the Department of Justice had more than 1,648 open investigations regarding pandemic unemployment fraud. Prosecutors need more time to hold criminals accountable.
Every day Congress waits to pass this bill is another day that another fraudster will get away with stealing money that rightfully belongs to taxpayers and individuals in need.
The Recover COVID Unemployment Fraud in Banks Act passed 41-0 out of the Ways and Means Committee. This bill has also received the endorsement from the National Association of State Workforce Agencies, the Taxpayers Protection Alliance, and the Strategic Services on Unemployment and Workers' Compensation.
Mr. Speaker, I urge my colleagues to provide a similar level of support and advance this to the Senate and President Trump's desk.
BREAK IN TRANSCRIPT
Mr. SMITH of Missouri. Van Duyne).
Ms. VAN DUYNE. Mr. Speaker, I rise today in support of H.R. 8873, the Recover COVID Unemployment Fraud in Banks Act, which I was proud to introduce with the gentleman from New York (Mr. Suozzi), my bipartisan partner.
This commonsense legislation creates a Federal task force to work with States to recover unspent Federal pandemic unemployment funds that remain frozen in financial institutions and return those taxpayer dollars to the U.S. Treasury, but Congress must act quickly.
Last December, the Department of Labor's Office of Inspector General issued two fraud alerts identifying nearly $1 billion in unspent Federal unemployment funds frozen by banks because of suspected fraud. Those funds are now sitting on millions of prepaid debit cards that States used to distribute supplemental unemployment benefits during the pandemic.
More than 6 years later, many of these accounts have simply been forgotten. They remain unreconciled by State workforce agencies and, in many cases, have even been transferred to State unclaimed property divisions, making recovery even that much more difficult. Without congressional action, hundreds of millions of taxpayer dollars could be lost permanently.
The Committee on Ways and Means has made combating pandemic unemployment fraud a top priority. Earlier this year, the Subcommittee on Work and Welfare held a hearing that examined the scope of this problem and the consequences of failing to act.
During that hearing, the Department of Labor Inspector General testified that the fraud alerts covered prepaid debit card accounts across 21 States and that more than $200 million in suspected fraudulent funds have already been transferred into State unclaimed property programs.
H.R. 8873 addresses this problem by establishing a Federal task force, led by a national recovery coordinator, to partner with States in identifying, recovering, and returning those Federal unemployment dollars to taxpayers.
The bill also extends the statute of limitations for prosecuting pandemic unemployment fraud from 5 years to 10 years. This provision mirrors H.R. 1156, the Pandemic Unemployment Fraud Enforcement Act, which passed the House last year with bipartisan support.
Federal investigators are still actively pursuing hundreds of pandemic fraud cases. Since October 2025 alone, the Department of Labor Inspector General has brought 59 criminal matters to prosecution, resulting in charges against 131 individuals and more than $16 million in recoveries. Extending the statute of limitations ensures prosecutors have the time they need to hold fraudsters accountable.
This legislation has earned bipartisan support from the National Association of State Workforce Agencies, the U.S. Chamber of Commerce, the Taxpayers Protection Alliance, and Strategic Services on Unemployment & Workers' Compensation.
Every dollar stolen through fraud is a dollar that cannot serve hardworking Americans or reduce our Nation's debt. It is not too late to recover these taxpayer funds, and it is not too late to hold criminals accountable. H.R. 8873 gives us the tools to do both.
Mr. Speaker, I urge my colleagues to support this bipartisan legislation.
Mr. Speaker, I am glad the Committee on Ways and Means was able to come together in bipartisan unity and bring this important piece of legislation to the floor.
The American people expect Congress to root out the fraud in the critical social safety net so many rely on, including unemployment insurance.
To date, only $6 billion of stolen UI benefits have been recovered.
It is shameful that these benefits were stolen from vulnerable Americans in the first place. It will be equally shameful if Congress doesn't pass the bipartisan bill, recover the fraudulent unemployment benefits we know are sitting in banks, and prosecute more fraudsters.
I thank all of my colleagues, but especially the leaders of this bill, Representatives Van Duyne and Suozzi, for their leadership in fighting fraud.
BREAK IN TRANSCRIPT
Source