Cybercrime Rings Are Stealing Billions in Government Aid Using Stolen American Identities

As federal agencies continue to battle fraud, experts warn that the greatest threat to U.S. taxpayer funds comes not from individual scammers, but from vast, international crime rings exploiting government aid programs. Linda Miller, a leading fraud prevention expert and former Government Accountability Office official, estimates that the U.S. may be losing close to $1 trillion annually due to sophisticated fraud, much of it orchestrated overseas. These operations, which surged during the COVID-19 pandemic, involve stolen American identities, deepfake technology, and synthetic profiles used to siphon funds from programs like unemployment benefits and disaster relief.

The scope of the theft is staggering. The FBI’s cyber division recently uncovered one case involving $6 billion in stolen unemployment funds. Foreign adversaries like China and Russia are among the top suspected destinations for these funds, with China-linked group APT41 implicated in financial cybercrimes against at least six U.S. state governments. Despite government efforts, most of the stolen money remains unrecovered, and the scale of the fraud challenges federal capacity to keep up.

Victims like Rich and Deann Wilken, who lost their home in the Los Angeles wildfires, find themselves caught in this criminal crossfire. After applying for FEMA aid, they learned their identities had been hijacked, delaying much-needed relief. Cases like theirs underscore a systemic vulnerability: when disaster strikes, cybercriminals are often first in line to exploit government aid.

The Department of Government Efficiency (DOGE), created under President Trump’s administration, aims to clamp down on fraud. While some applaud its mission, critics like Miller caution that DOGE must distinguish real fraud from wasteful but legal spending. Until then, the U.S. remains exposed to what some are calling the largest fraud epidemic in national history.