Breaking Down the Government’s Estimate of Fraud
Welcome to The Anti-Fraud Coalition’s Fourth Annual Fraud By The Numbers! In years past we have used concrete numbers from budgets, recoveries under various whistleblower programs, and anything quantifiable we could find to show how fraud impacts us. This year, for the first time ever, we actually have the federal government’s estimate of how much of our taxpayer funds are lost to fraud. The results are staggering and reinforce what TAF Coalition and its members have been saying for years.
The April 2024 Government Accountability Office (GAO) report estimates that, based on data gathered between 2018-2022, the federal government is losing $233-521 billion per year to fraud. In other words, fraud on the federal government is responsible for anywhere from roughly the GDP of Greece to what it would cost to purchase the White House approximately 1,300 times over each year. Or if you prefer percentages, using the federal budget of about $6.1 trillion for FY 2022 as an example, that means GAO estimates that 3.8 to 8.5 percent of the budget never made it to its intended use.
The $521 billion at the upper limit of that estimate is the amount budgeted for FY 2023 to fund defense operations and maintenance and pay to military personnel with about $30 million left over. It is enough to fund half of all nondefense discretionary spending. It is enough to fund all mandatory income security programs such as the Supplemental Nutrition Assistance Program and Family Support and Foster Care with $73 billion left over.
The $288 billion difference between the upper and lower limit of GAO’s estimate is significant in and of itself. GAO can’t say, for sure, that it isn’t losing more than a quarter of a trillion dollars – every year – to fraud. That is where the False Claims Act (FCA) comes in and where whistleblowers play a vital role in exposing what the government can’t prove on its own. But recoveries under the FCA, the government’s number one weapon for recovering federal funds lost to fraud totaled just $2.68 billion for FY 2022. As a stand-alone number it sounds huge – and it is – but it is just about 1% of the lower limit of estimated taxpayer dollars lost to fraud in a single year. It looks like we have an uphill battle on our hands, folks!
But fraud on the federal government is just one of the hills. Over the course of the next month, we are going to explore our need for more whistleblowers and more resources for whistleblower programs in all sectors: the largest federal programs like healthcare and defense, fraud on state governments, financial frauds, and beyond! Funding these programs, aggressive enforcement, and advocating for whistleblowers who bravely step forward to stop fraud are the best ways to detect and deter every kind of fraud, and not just fraud on the federal government. Each weekday during September we will be looking at how the numbers bear this out.
Armed with these numbers and many others, Fraud by the Numbers aims to illustrate where we are in the fight against fraud – we’ve said it before, and we’ll say it again: the numbers don’t lie; fraudsters do. Fraud by the Numbers is a massive undertaking each year, and we’d like to thank all of our contributors for their time researching, writing, and editing to make this year’s series a success:
– The Anti-Fraud Coalition staff in addition to myself: James King (Director of Communications & Digital), Grace Swindler (Director of Legal Education), Rosie Tomiak (Public Interest Advocacy Fellow), and Caroline Nolan (former Legal Intern).
– The Anti-Fraud Coalition Public Education Committee Members: Clay Wire (Ogborn Mihm), Tony Munter (Price Benowitz), Nick Mendoza (Murphy Anderson), Max Rodriguez (Law Office of Max Rodriguez), and Scott Terry (Florin Gray) for their contributions in writing and editing many of the posts in this project.
– TAF Coalition Members: Kate Scanlan (Keller Grover), Molly Knobler (DiCello Levitt), Roger Wenthe (Roger Wenthe, PLLC), Emily Stabile (Phillips & Cohen), Rachel Rose (Rachel v. Rose – Attorney at Law), and Max Voldman (Whistleblower Partners)
We hope the complete Fraud by the Numbers collection – more than 100 posts – will be helpful to whistleblower lawyers and lawyers for the government, but they are intended to be read and shared by non-lawyers, potential whistleblowers, and other people interested in the fight against fraud. Please share these posts, and use the numbers and collected resources in your own fight against fraud. If you want to follow more of TAF Coalition’s work in this area, please also subscribe to the weekly newsletter.
Jacklyn DeMar is the President & CEO of The Anti-Fraud Coalition
