Labor Department Deploys Strike Team To New York Over Massive Unemployment Fraud
The Trump administration has deployed a federal strike team to New York as part of an intensified crackdown on unemployment insurance fraud after federal officials estimated the state is losing nearly $2 million every day to fraudulent and improper benefit payments.
The Department of Labor‘s Office of Inspector General is leading the effort alongside Acting Labor Secretary Keith Sonderling. Inspector General Anthony D’Esposito said New York has become one of the nation’s worst offenders for unemployment fraud, with taxpayers continuing to lose millions of dollars each day.
“New York is stealing from the American people every single day, draining their hard-earned tax dollars through rampant unemployment insurance fraud and improper payments,” D’Esposito said. He pledged to identify those responsible, recover stolen funds, and prosecute offenders with the support of President Trump and Vice President JD Vance‘s Fraud Task Force.
Federal officials said New York recorded more than $750 million in improper unemployment insurance payments and another $507 million in fraudulent payments during 2025. Despite those losses, the state has recovered only about 25% of the stolen funds. Officials also reported that New York has one of the nation’s highest improper payment rates at 23%, with a fraud rate of approximately 15%.
The strike team follows earlier Labor Department efforts to recover fraudulent pandemic-era unemployment benefits nationwide. Last month, the department announced it had recovered more than $9 million from New Jersey after uncovering more than 53,000 fraudulent claims involving prisoners, deceased individuals, children, and stolen identities.
Republican Sens. Bill Cassidy and Tim Scott have also launched a congressional investigation into unemployment fraud in New York, California, and Massachusetts. In a recent letter to New York Gov. Kathy Hochul, they pointed to multiple examples of fraudulent claims, including one involving former Congressman George Santos, who allegedly collected approximately $24,000 in unemployment benefits while employed.
Gov. Hochul’s administration has disputed claims that fraud remains widespread, saying the New York Department of Labor has implemented new anti-fraud safeguards since the pandemic and continues working with law enforcement to identify and prosecute offenders.
The deployment of the federal strike team marks the latest phase of the Trump administration’s broader effort to recover billions of dollars in taxpayer funds lost through pandemic-era fraud and strengthen oversight of unemployment insurance programs across the country.