Just under $1 billion in unemployment benefits issued during the Covid 19 pandemic have not been spent and may be subject to fraud, a new Labor Department report says.
Anthony D’Esposito, the Labor Department’s Inspector General, has issued a statement saying that the nearly $1 billion is “taxpayers’ money—and it demands immediate attention.”
“We’ve done the investigative work,” said D’Esposito. “We’ve identified where the money is. There is no excuse for delay, and no acceptable outcome other than returning these dollars to the American people.”
Most of the funds in question were issued by the Labor Department on prepaid debit cards. According to the Inspector General’s office, another $192 million has ended up in state unclaimed property offices.
The Inspector General’s office said it knows of one prepaid debit card account containing around $76,000 in benefit funds.
Around 6.5 million prepaid debit cards were issued during the months of the pandemic. To date, the Inspector General’s office has recovered around $2.2 billion in funds and prosecuted roughly 2,300 people.
According to reports, the office has also petitioned the Employment and Training Administration, which is an agency within the Labor Department, to send guidance to the states on how the funds can be recovered.
The guidance is intended to provide the states with the proper methods for returning such funds to the federal government.
Funding was provided during the Covid pandemic through the Pandemic Unemployment Assistance program, Federal Pandemic Unemployment Compensation, and Pandemic Emergency Unemployment Compensation.
February 19, 2026
By Garry Boulard
Photo courtesy of Department of Labor
