The Government Sent $100 Billion to Prisoners, Dead People, and Nigerian Email Addresses.

No Income Verification. For Nine Months. On Purpose.

When Congress created the Pandemic Unemployment Assistance program in March 2020 to extend benefits to gig workers and the self-employed, it made a deliberate decision to skip the income verification step. States were instructed to pay first and verify later — “flexibility” language that was intended to get money to workers quickly, but that removed the single most important fraud control in the unemployment system.

For nine months, anyone who self-certified that they were a self-employed worker who had lost income due to COVID-19 could receive federal pandemic unemployment benefits — without providing any documentation of prior income. You said you made $3,000 a month as a freelance photographer. The government sent you 60% of $3,000 a month. No photographer’s portfolio required.

Nigerian Cybercriminals Filed Claims in 25 States. From Canada.

DOL investigators identified a coordinated network of Nigerian nationals operating from Canada who filed fraudulent PUA claims across 25 U.S. states — using stolen American Social Security numbers and synthetic identities created from publicly available data breaches. The network, documented in DOL OIG’s “Operation Golden Egg,” exploited the same no-verification gap that domestic fraudsters had discovered: submit a claim, receive a direct deposit, move on.

The Treasury Inspector General identified 69,000 payments sent to deceased individuals. The DOJ’s “Operation Jailbird” found more than $1 billion in pandemic UI fraud committed by incarcerated individuals in multiple states — people who were definitionally unable to seek employment but whose identities were used to file claims.

“California paid fraudulent unemployment benefits to Nigerian cybercriminals, incarcerated individuals, and people who had been dead for years — while hundreds of thousands of legitimate claimants waited months for their benefits.”

California State Auditor Report 2021-110 — EDD's Response to the COVID-19 Pandemic

California Lost $32.6 Billion. Then Biden Promoted Her.

Julie Su served as California’s Labor Secretary from 2019 to 2023, overseeing the EDD through the period of maximum fraud exposure. In March 2023, President Biden nominated her to serve as Deputy Secretary of Labor under Marty Walsh, then nominated her as Acting Secretary of Labor after Walsh resigned. The Senate declined to confirm her twice; she served as Acting Secretary without Senate confirmation.

The state of California has not recovered the vast majority of the $32.6 billion lost. The GAO’s national estimate of total pandemic UI fraud — between $55 billion and $135 billion, with $135 billion as the best estimate — represents the most comprehensive federal accounting of the loss. As of 2026, DOL has recovered $6.8 billion: approximately 5% of the low estimate, and under 5% of the best estimate.

35.9% Improper Payment Rate. The Highest in Federal History.

The official DOL improper payment rate for pandemic-era unemployment programs peaked at 35.9% — meaning that out of every $100 paid, $35.90 went to someone who shouldn’t have received it. This is the highest improper payment rate ever recorded for a major federal program. For context: the EITC, which has been on the GAO high-risk list for thirty years, runs at 33.5%. The pandemic UI program exceeded even that.

The combination of no-verification policy, state systems not designed for the volume, and a global criminal ecosystem primed to exploit American benefit systems produced the fastest and largest theft of public funds in American history. Congress has not passed legislation requiring income verification for future emergency unemployment programs.