A federal strike team has been deployed to New York as part of an intensified effort by the Trump administration to combat widespread unemployment insurance fraud. Officials estimate that fraudsters are currently siphoning approximately $2 million per day in unemployment benefits in the state, contributing to a pandemic-era total that has reached nearly $1 billion. The Department of Labor's Office of Inspector General (OIG) is participating in the joint task force.
Inspector General Anthony D’Esposito stated that New York is losing significant funds daily due to rampant unemployment insurance fraud and improper payments. He indicated that the state has only recovered about 25% of the fraudulently obtained funds. D’Esposito vowed a "tough-on-crime approach" to dismantle the fraud network, recover stolen money, and prosecute those responsible.
"Backed by the full strength of President Trump and Vice President Vance’s Fraud Task Force and our coordinated OIG and Departmental efforts, our joint federal Strike Team will deliver the swift justice that hard working Americans deserve," D’Esposito said. "Accountability is not an option."
DOL officials have identified New York as having some of the highest rates of improper payments and fraud among all states, with rates of 23% and 15%, respectively. In 2025 alone, the state recorded over $750 million in improper unemployment insurance payments and $507 million in fraudulent payments. These figures were highlighted in letters sent by Acting Secretary Keith Sonderling and members of Congress to New York Democratic Governor Kathy Hochul and governors of other states.
A spokesperson for Governor Hochul's office has previously stated that the New York State Department of Labor takes fraud seriously and has implemented measures to combat it since the pandemic began. "We continue to work with our law enforcement partners to pursue criminals and hold perpetrators accountable while ensuring workers receive the benefits to which they are entitled under law efficiently," the spokesperson said.
Recent investigations have also uncovered fraud in other states. Last month, the DOL OIG announced the recovery of $9 million from New Jersey that had been illicitly obtained by scammers involved in COVID relief programs. Senators Bill Cassidy and Tim Scott have also been conducting parallel investigations into unemployment fraud targeting taxpayer-funded programs in California and Massachusetts.