Saturday, May 25, 2024
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First of its Kind Report Explains How Much Fraud Costs Taxpayers



Federal taxpayers lost between $233 billion to $521 billion to fraud between fiscal year 2018 through fiscal year 2022.

This is according to a report that the U.S. Government Accountability Office (GAO) published this month.

“The data include time periods and programs with and without pandemic-related spending,” according to the GAO report. 

The GAO collected data from three sources to develop the estimate: 

• Investigative data, such as the number of cases sent for prosecution and the dollar value of closed cases

• Office of Inspector General (OIG) semiannual report information

• Confirmed fraud data reported to the Office of Management and Budget (OMB) by agencies

The GAO said this report was the first of its kind.

“While the government obligated almost $40 trillion from fiscal years 2018 through 2022, no reliable estimates of fraud losses affecting the federal government previously existed,” the GAO said.

As only one example cited, in March 2024, the Department of Health and Human Services Office of Inspector General (HHS OIG) issued a consumer alert related to scams that involve obtaining a Medicare enrollee’s personal information. The scam then billed for unnecessary, low-cost medical equipment. 

“An alleged fraud ring may have used the scheme to overbill Medicare for more than $2 billion since 2022,” the report said. 

“It is alleged the fraud ring employed multiple small charges to many victims to help avoid detection.”

Risk factors for fraud include the following:

• A reliance on self-certification

• Programs that are new to the agency

• Expansions or major changes in program funding, authorities, practices, or procedures

• A large volume of payments being made

• Payment or eligibility decisions made outside of the agency, such as those by state governments

• Limitations in the experience or training of those making eligibility determinations or payment certifications

• Challenges related to eligibility and identity, such as lack of information or data systems to confirm eligibility. 

“We have previously reported that artificial intelligence has created opportunities for improved oversight and fraud detection. Artificial intelligence can use algorithms and models to reveal anomalous patterns, behaviors, and relationships—with speed, at scale, and in depth—that was not possible previously,” the GAO wrote.

“Despite these opportunities, artificial intelligence can also pose new risks to agencies and others, such as by creating fake images to assist with developing falsified documentation or to create fake audio to assist in impersonation schemes.”

Special thanks to Warhammer’s Wife proofreading this story before publication to make certain there were no misspellings, grammatical errors or other embarrassing mistakes and/or typosFollow Warhammer on Twitter @Real_Warhammer. Also follow Warhammer on TruthSocial at @Real_Warhammer