Here’s Vance’s Plan To Attack $250 Billion In Annual Fraud Losses

The Trump administration’s efforts to attack government fraud is beginning in earnest, with a memo directing the first steps for the President’s Task Force to Eliminate Fraud, which the government says accounts for $250 billion in losses every year.

“Every year, hardworking Americans pay taxes to fund a vast benefits system for citizens in need. These benefits programs are laudable and are a testament to the generosity of the American people,” the memo to task force members from Vice President J.D. Vance and Federal Trade Commission Chairman (FTC) Andrew N. Ferguson, who serves as the task force’s vice chair, states. “Unfortunately, these programs have been plagued by decades of waste, fraud, and abuse. By one estimate, fraud in federal benefits programs results in losses of about $250 billion per year, and the true number may be higher. These funds are stolen both from the taxpayers and from vulnerable Americans most in need of help.”

Fraudsters like the Somalis in Minnesota and many others across the country (many of whom are foreigners) are “bleeding the federal government dry, robbing taxpayers, and denying honest Americans the services for which they have paid,” the memo states.

The Centers for Medicare and Medicaid Services (CMS) recently identified and suspended 70 hospice and home health providers flagged for fraud. That comes after Vance and CMS administrator Mehmet Oz suspended nearly $260 million in Medicaid funds going to Minnesota in February due to fraud concerns.

“The American people deserve better than being ripped off by people who hate this country,” a Vance spokesman told The Federalist.

The task force aims to essentially audit government programs, starting with the most costly programs that also have the fewest verification safeguards. The memo states they will attempt to recover the money that has been stolen, but acknowledges that doing so is extremely difficult.

It states that of the roughly $250 billion per year lost to fraud, the government only recovers about $10 billion.

“Plain and simple, ‘pay-and-chase’ does not stop fraud. We cannot litigate ourselves out of the fraud problem,” the memo states. “The federal government simply does not have the resources necessary to recover all of the money lost to fraud once it has been paid out. Many fraudsters are judgment proof and therefore could not pay back the money they stole even after a successful prosecution. Moreover, the federal government has confronted hostile, partisan, and lawless federal judges in nearly every State, which pose yet another obstacle to litigating our way out of the fraud crisis.”

While there certainly will be litigation against anyone committing fraud, which is the first of four steps outlined in the memo, and will be led by the Department of Justice’s new Assistant Attorney General (AAG) for Fraud, Colin McDonald, the memo also states that the task force must also be aimed at preventing fraud before payments are made.

The memo directs major payor agencies to use data to find patterns such as “unreasonable growth, impossible services or services not actually being rendered, numerous companies at the same location, and other hallmarks of fraud,” in order to deny payment. It also states that the agencies should develop ways to deny payment of program money when the risk of fraud reached “unacceptable levels.”

“In light of the fraud crisis, agencies must abandon any presumptions in favor of payment; they must pay only when they are confident that the payment is legitimate and lawful,” it states.

The focus on “high-spend, low-verification programs” will include “top areas of concern” like Medicare and Medicaid at $2 trillion per year. Also included are other federal benefits programs administered by states like Unemployment Insurance (UI) ($43.5 billion per year), Supplemental Nutrition Assistance Program (SNAP) ($101 billion per year), Rental Assistance and Public Housing ($64 billion per year), Small Business Administration loans ($100 billion per year), disaster assistance ($6 billion per year), and much more.

On top of reviewing current anti-fraud mechanisms in place in the government, the task force will also look into whether the Biden administration even used the anti-fraud tools at their disposal.

The task force also has a wide range of what it considers fraud, because while “the classic example of fraud involves the government paying people and businesses to provide services that are never provided,” the memo states, “billions of dollars are lost every year to more subtle varieties of fraudulent conduct.”

“Ghost” billings are payments to “fake businesses to provide fake services,” the memo says, using the coronavirus pandemic response Paycheck Protection Program (PPP) as an example.

Then there is “substandard fraud,” which is a “low-quality service provided to a real beneficiary” such as nursing homes.

“Upcoding/overbilling” is often committed by hospitals, where they are a legitimate organization providing a legitimate service, but then they manipulate the bill to exaggerate diagnoses to justify more expensive services than needed.

“Necessity fraud” can take the form of Medicare fraud where a legitimate doctor gives an actual patient a treatment they do not need, like unnecessary lab tests.

Minnesota and Los Angeles fraud uncovered by independent journalists have likely not even begun to scratch the surface of the true amount of fraud in the United States, as the memo implies, but the concerted efforts to uproot it, and a dedicated person at the Department of Justice to prosecute it, may provide the kinds of resources and authority to right the ship.

Breccan F. Thies is the White House correspondent for The Federalist. He is a co-recipient of the 2025 Dao Prize for Excellence in Investigative Journalism. As an investigative journalist, he previously covered education and culture issues for the Washington Examiner and Breitbart News. He holds a degree from the University of Virginia and is a 2022 Claremont Institute Publius Fellow. You can follow him on X: @BreccanFThies.