NEWT GINGRICH AND RACHEL PETERSON: Washington must act to stop massive government fraud

The federal investigation into fraud in Minnesota is sadly just the tip of the iceberg. The scale of fraud and corruption in state and federal government programs, along with the lack of proper controls to prevent fraud, may be one of the biggest problems Americans face.

In March, President Donald Trump issued an executive order establishing a task force to eliminate fraud. It will be chaired by Vice President JD Vance, who will direct agencies to identify vulnerabilities in their systems to help prevent fraud before it occurs. This is vitally important.

When my team at Gingrich 360 looked into the widespread corruption in Minnesota, we were shocked by how much fraud and corruption there was. We have posted a paper on our findings.

As you may recall, Feeding Our Future in Minnesota falsely claimed to serve 125 million meals to children and submitted a fake attendance roster listing 2,040 children, only 20 of whom matched district school attendance records. The Minnesota Office of the Legislative Auditor's June 2024 review found that the Department of Education ignored at least 30 complaints about Feeding Our Future and failed to verify its statements before approving funds.

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FBI and law enforcement agents raid Mini Childcare (formerly Mako Childcare) in south Minneapolis on Tuesday, April 28, 2026. Mini Childcare was one of 22 sites targeted Tuesday morning as part of a fraud probe in Minnesota. (Anthony Souffle/The Minnesota Star Tribune via Getty Images)

In looking into this, we discovered that this is not an isolated case.

A February 2025 Department of Health and Human Services audit of Colorado’s Department of Health found that the state’s Medicaid program made at least $7.3 million in payments on behalf of deceased enrollees.

A January 2026 FCC Office of Inspector General report revealed that between 2020 and 2025, $5 million in federal funds allocated for subsidized internet for the poor were sent to nearly 117,000 people who were dead. What’s most alarming is that many of these individuals were enrolled and claimed benefits after their deaths in multiple states within the same month.

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It’s crucial to shift the focus from recovering stolen funds to preventing fraud altogether. While recovering stolen money is necessary, stopping fraud before it occurs ensures government funds reach those who truly need them.

The Government Accountability Office estimates that the federal government loses between $223 billion and $521 billion each year to fraud, based on data from fiscal years 2018 to 2022. In 2024, the Treasury Department successfully prevented and recovered more than $4 billion in fraud and improper payments, a small fraction of overall losses. 

First, we need to implement checks before the money leaves the bank.

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The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the Pandemic Response Accountability Committee (PRAC) to oversee pandemic spending. As a test, in June 2025, the PRAC issued a fraud alert on Social Security numbers used to access relief funds from three programs.

The committee sampled records and asked the Social Security Administration three simple questions: Was the SSN valid? Did the name and date of birth match? Was the individual alive? This identified $79 billion in potential fraud involving 1.4 million stolen or invalid SSNs. Had these checks been in place before the pandemic, they could have prevented this massive fraud.

It’s crucial to shift the focus from recovering stolen funds to preventing fraud altogether. While recovering stolen money is necessary, stopping fraud before it occurs ensures government funds reach those who truly need them.

Second, we must ensure that different departments communicate effectively. The PRAC found more than 40,000 cases in which applicants reported higher income to the Small Business Administration than to Housing and Urban Development. This suggested potential fraud. Better info sharing could have revealed this earlier.

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Third, we should use AI to prevent fraud before money leaves the Treasury. The PRAC's "Fraud Prevention Engine" reviews 20,000 applications per second to detect anomalies. Testing on 5 million SBA disaster loan applications found one case in which 100 applicants submitted 450 applications across 24 states, securing $2.6 million.

Finally, we must strengthen existing checks like the Treasury Department's Do Not Pay Initiative, which offers agencies free access to databases to verify payment eligibility.

Despite its potential, agency adoption and compliance are inconsistent. In fiscal year 2024, only 4% of agencies met legal requirements to access these databases. The Congressional Research Service reported that it is unclear how many agencies use the databases regularly or to what extent.

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HUD’s fiscal year 2024 audit found inconsistencies in its database because a computer matching agreement with the Treasury Department expired in 2019. Even after regaining access in February 2025, HUD continued to use the database inconsistently.

The Do Not Pay Initiative faces limits due to the Privacy Act of 1974, slowing data acquisition. In March 2025, President Trump issued an executive order expanding the program to more agencies and waiving the contract requirement for four years. While positive, Treasury still seeks authority to access data sources such as the National Directory of New Hires and Fair Credit Reporting Act information.

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The time has come for Congress and state legislators to prioritize preventing government fraud before it occurs. At Gingrich 360, we wrote a white paper explaining this issue, which we encourage everyone to read to understand the full scope of the problem.

We simply cannot afford to continue letting people steal billions of dollars from taxpayers.

Rachel Peterson is director of Research and coordinator of National Security Affairs for Gingrich 360.

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