Fraud Risk in Federal Programs: Continuing Threat from Organized Groups Since COVID-19

What GAO Found

Organized groups of individuals working together have defrauded public programs, as was evident during the COVID-19 pandemic. Although the full extent of pandemic relief fraud is not known, estimates from some of the largest pandemic relief programs put losses around $300 billion.

According to GAO’s analysis of Department of Justice public statements and court documentation from March 2020 through December 2024, 46 percent of the 1,875 defendants convicted of pandemic-fraud-related offenses with final charges recorded had conspiracy charges, suggesting involvement of an organized group.

Organized fraud groups that target government programs generally fall into three types and vary in size, structure, and participants. The types are (1) organized criminal enterprises, (2) groups organized around a program, and (3) opportunistically organized groups.

Types of Organized Fraud Groups Targeting Government Programs

Organized criminal enterprises involve established criminal syndicates that may have other lines of illicit activity. Groups organized around a program may involve program participants and facilitators who conspire to defraud the program they are connected to. Opportunistically organized groups involve clusters of individuals who come together as opportunities for fraud arise.

These groups have used technology, program knowledge, and other means to commit fraud on a large scale against government programs. The stages of an organized fraud scheme include methods such as gathering materials and information, defrauding programs on a large scale across multiple regions, evading detection, and laundering fraudulently obtained funds.

Organized fraud harms people, programs, and society in financial and nonfinancial ways that deplete program funds and cause physical and psychological harm. For example, people may be harmed when food assistance funds are stolen, and they are unable to purchase groceries. Programs may be harmed when the public loses trust in the program’s ability to carry out its mission. Society is harmed when public funds are diverted to other illicit activity.

Program managers, oversight and payment integrity entities, and law enforcement have roles in preventing, detecting, and responding to organized fraud. They use a range of data analytic tools—from basic techniques like data matching to advanced techniques like network analytics—to identify, prevent, and detect fraud. For example, officials from an oversight agency told GAO that they used data analytics to help uncover nearly $109 million in fraudulent loan applications, leading to guilty pleas in 2025. Similarly, a federal agency said it used its data tool to stop over 99 percent— over $4.2 billion as of July 2024—of payments before they were paid to potential bad actors.

Evolving fraud tactics, data and systems silos, and efforts to balance program delivery with fraud controls are challenges in preventing and detecting organized fraud. Although it is not possible to eliminate all risks, comprehensive fraud risk management, education, analytics, and collaboration can enhance prevention and detection. One of the leading practices in GAO’s Fraud Risk Framework, for example, is to regularly conduct fraud risk assessments. Entities can conduct, and have conducted, such assessments at the program development stage, and throughout program administration, to help prevent and detect organized fraud. Leveraging these approaches is particularly important, given the continuing threat from organized groups. Since the issuance of the framework, GAO has made numerous recommendations to enhance fraud risk management across federal programs.

Why GAO Did This Study

Aided by technology, organized groups have targeted programs at a larger volume and with greater speed than individuals. Using various fraud schemes, technology, and key information, organized groups, both domestic and transnational, continue to pose a threat to public programs.

The CARES Act includes a provision for GAO to monitor and oversee the federal government’s efforts to prepare for, respond to, and recover from the COVID-19 pandemic. This report provides information on organized fraud risks to public programs and agencies’ roles in preventing and detecting such fraud. To provide this information, GAO conducted a literature review; reviewed relevant fraud cases and other documentation; and interviewed and obtained written responses from selected federal, state, and foreign entities.