GAO estimates FRAUD costs taxpayers up to $521 billion annually; FRAUD would be govt’s ‘sixth largest agency’

American taxpayers are the victims of so much fraudulent activity that “if fraud was an agency, it would be the federal government’s sixth largest.” The  U.S. Government Accountability Office (GAO) estimated annual fraud costs taxpayers between $233 billion and $521 billion annually, according to a new report published Tuesday.

The range represents 3% to 7% of average federal obligations. The Center Square notes the estimate was “based on data from fiscal years 2018 through 2022. The government obligated almost $40 trillion from fiscal years 2018 through 2022, but had no reliable estimates of fraud losses.”


“The federal government’s estimated annual financial losses to fraud of between $233 billion and $521 billion is just the tip of the iceberg,” David Walker, former comptroller general of the United States and a member of the advisory board of Main Street Economics told The Center Square. “When you add waste, abuse, and mismanagement, the numbers are much bigger.”

GAO Director of Forensic Audits and Investigative Service Rebecca Shea said that most federal spending isn’t fraudulent and that the amount of fraud varies greatly by agency. However, those dollars still add up:


“Collectively, the taxpayer is losing a significant amount to fraud every year annually,” she said. “And for a little bit of perspective on this relative to agency funding – the top of our range is greater than the budget for all but the top five agencies. And the bottom of our range, it’s larger than the ninth largest federal agency. So, the context for that, what we’re seeing with this estimate, is that fraud may be the sixth largest agency that we are funding annually, and that’s a lot of money that could be going to better use.”

There are more ways to put the fraud estimates into context. At the high end of the estimate, $521 billion is enough money for the U.S. Air Force to buy 751 nuclear-capable B-21 Raider stealth bombers at $692 million per plane. The Air Force plans to buy at least 100 such planes. That’s also enough money to run the Supplemental Nutrition Assistance Program, formerly known as food stamps, for about 4.7 years at 2023 fiscal year spending levels, according to the Center Square.

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