Statute of limitations for pandemic unemployment fraud expires; bipartisan coalition seeks extension

Federal law enforcement's hands are tied now that the statute of limitations for prosecuting fraud in COVID-era unemployment programs has expired.

While Congress extended the statute of limitations for pandemic-era business relief fraud in 2022, the window to prosecute fraud in individual relief programs closed Thursday.

"Every day that goes by from today, we lose the ability to prosecute fraud day by day. That's a huge problem, and this should be something that's an easy fix for Congress."

Despite opposition from 127 House Democrats, including Minority Leader Hakeem Jeffries, the House passed a bipartisan bill earlier this month to extend the statute of limitations for pandemic unemployment fraud from five to 10 years. The move mirrored what lawmakers did for the Paycheck Protection Program and the Economic Injury and Disaster Loans program in 2022.

According to estimates from the Government Accountability Office, as much as $135 billion in pandemic unemployment insurance programs was lost to fraud during the pandemic. So far, only $5 billion, or less than 4%, has been recovered. 

Unless the statute of limitations is extended by Congress, federal law enforcement will be unable to prosecute these cases.

Moylan noted the majority of unemployment fraud during COVID stemmed from "loopholes" so big "you could drive a truck through" them in the Pandemic Unemployment Assistance program. 

When asked why he thought the Senate had not yet taken up a bill to extend the statute of limitations for pandemic unemployment fraud, Moylan posited that it was "an attention span thing."

"This hasn't been top of mind the way that nominations have been in the first part of the year for the Senate, or budget resolution, or now tax conversations, or, you know, whatever the scandal of the day may be," Moylan said.

"Those are the things that seem to dominate proceedings in the Senate. We now are in a situation where, if they don't act soon, we're going to lose the ability to prosecute more fraud in this program."