Federal Strike Team Sent to New York as State Recovers 25% of Pandemic Unemployment Fraud

The Trump administration deployed a federal strike team to New York on Monday to address nearly $1 billion in unemployment benefits fraud during the COVID-19 pandemic, nypost.com reported. The Department of Labor Office of Inspector General, which identified the fraud total, is part of the joint effort. New York loses up to $2 million per day to fraudsters, according to administration officials.

Only 25 percent of the fraudulently received funds have been recovered by New York State, Labor Department officials said. ” New York posted one of the highest rates in the country, with 23 percent improper payments and 15 percent fraud, the officials noted. The state recorded more than $750 million in improper unemployment insurance payments and $507 million in fraudulent payments in 2025.

Acting Secretary Keith Sonderling and members of Congress sent letters on the issue to New York Gov. Kathy Hochul and other governors. Sens. Bill Cassidy of Louisiana and Tim Scott of South Carolina are conducting a parallel investigation that also covers California and Massachusetts.

Last month the Labor Department Office of Inspector General announced recovery of $9 million from New Jersey in a separate COVID relief fraud case.