Fraud on Federal Money

The GAO has previously estimated that the federal government loses between about $233 billion and $521 billion per year to fraud, based on data from 2018-2022. This range is widely cited as a proxy for ongoing fraud risk.

That is money that costs taxpayers and adds to the Federal Deficit. The Deficit was $ 1.78 Trillion in 2025.  Eliminating Fraud could reduce the Deficit by up to 30%.

Unfortunately, The GAO estimate may be only the tip of the iceberg.

Recent revelations have found rampant fraud in Minnesota and California.

In Minnesota alone, prosecutors have already found $ 9 Billion in fraud, and estimates go as high as $ 30 Billion.

There is no way to make an accurate projection for the total in the U.S.

Just assume that the GAO estimate is understated by $250 Billion.  That would put total Fraud at $ 770 Billion per year – over 10% of the Total Federal Budget.

How Does This Happen ?

Cogport has been a frequent critic of the Federal Bureaucracy for its lack of management efficiency and controls.

The absence of internal oversight is a glaring outcome.  Federal funds have become easy prey for fraudsters.  The Citizens and taxpayers pay the cost.

A lack of accountability within Government Management and a failure of the Congress and Justice Department to pursue the problem.

The Big Picture

The Trump administration announced a national anti-fraud task force that will focus on California among other states — signaling federal scrutiny of potential large-scale fraud but without issuing a precise dollar estimate yet.

That is all well and good – the Justice Department should enforce the law against fraud.

However, it does not address the bigger picture of a Federal Bureaucracy that is poorly managed, and a proliferation of programs that are out of control.  Where is the President’s comprehensive plan to correct this – have not seen it yet.

What to Do ?

Cogport has been a proponent of reducing the amount of Federal intervention and spending in local affairs.  States and Localities have become dependent on Federal Funding.  The grasp of power and money by the Federal Government has not served us well.

The original design of our Constitution was a Republic of States with limited Federal Government.  Federal expansion over the last 75 years has created a byzantine system that ill serves the People.

Programs and Fiscal Responsibilities need to be returned to the States who better know how to serve their local needs.  The Federal Government solutions of “one size fits all” are a dysfunction at a huge, unnecessary cost.

Neither the President or Congress are willing to cut back on the power and money they now possess.  It is up to the People to let them know that this must change.

David Hollaender                                      February 5, 2026

Cogport.com