The Fraud Industry Is Thriving, And Guess Who’s Happy About It
I & I Editorial Board
July 10, 2026
“Michael, we’re bigger than U.S. Steel.” — Hyman Roth, “The Godfather Part II“
The mobsters in “The Godfather” set their sights way too low. If they really wanted to make it big time, they should have targeted federal entitlement programs instead of gamblers and drug addicts. Not only does it pay better, but you can count on one political party to look the other way.
The Government Accountability Office (GAO) figures that fraudsters make off with more than $500 billion of federal taxpayer money a year, plus another $184 billion in “improper payments.”
That isn’t just bigger than U.S. Steel. That’s five times as big as the entire steel industry.
Every day, it seems, there are reports of fraud, most of it involving federal entitlement programs. Everyone knows about the massive fraud uncovered in Minnesota, Ohio, and California. But the stories just keep trickling in.
Just last month, the Justice Department charged 455 defendants for what amounts to $6.5 billion in alleged false medical claims.
Around the same time, Herbert Leon Kimble was arrested in the Philippines on charges that he ran a $1.2 billion Medicare fraud conspiracy.
Investigators in Alaska charged 15 people with close to $2 million in Medicaid fraud.
A Brooklyn, N.Y., retailer has been charged with stealing more than $640,000 in food-stamp benefits from people in Ohio.
The truth is, we have no idea how much fraud there is. The GAO estimate is more of a guesstimate than a reliable figure, and the top number on its range is probably too low, given the lackadaisical efforts states put into fighting fraud. In New Mexico, for example, a state with the highest share of people on food stamps, a legislative report found that the state followed up only 3% of the tips it received about fraud.
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https://issuesinsights.com/2026/07/10/the-fraud-industry-is-thriving-and-guess-whos-happy-about-it/
