The Department of Labor (DOL), in collaboration with the White House Task Force to Eliminate Fraud, has deployed a strike force to New York to recover hundreds of millions in unemployment fraud payments.
"New York has exhibited fraud and improper payment rates on a scale we’ve never seen before—draining nearly $2 million a day from hardworking American taxpayers," DOL Inspector General Anthony D’Esposito told Fox News Digital. "While the state is cooperating with our review, these numbers are simply unacceptable. Our strike team will ensure the system is operating exactly as intended with no underlying issues."
New York contributed to $750 million in improper unemployment insurance claims, and has accounted for $507 million of those claims paid out in 2025, according to numbers reported to the federal government by the state.
Now, the Trump administration wants to claw back those funds it says were obtained through fraudulent means in the Democrat-led state.
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New York has the highest unemployment insurance fraud rate in the country at 15%, according to the DOL. The federal government says the state also has the highest improper payment rate at 23%.
Of the $507 million in overpayments, New York has only managed to recover 25% of the total, which is well below the national actual loss prevention average of 69%.
A spokesperson for New York Gov. Kathy Hochul's office told Fox News Digital that she is implementing policies to prevent fraud, which has been a longstanding priority of President Donald Trump's second term.
"Governor Hochul and the State Department of Labor take fraud and abuse very seriously. That’s why the Governor has led the way in implementing several changes since the pandemic to fight waste, fraud and abuse," the Democrat leader's spokesperson said.
"We will continue to work with our law enforcement partners to pursue criminals and hold perpetrators accountable while ensuring workers receive the benefits to which they are entitled under law efficiently."
THE WAR ON FRAUD IS HERE, AND VICE PRESIDENT VANCE IS LEADING IT FROM THE FRONT
The DOL described its collaboration with the recently announced White House Task Force for Eliminating Fraud as "unprecedented."
Trump instituted the task force by executive order in March and tapped Vice President JD Vance to lead the effort.
"My Administration will use all available resources and authorities to fight fraud, close loopholes, enforce eligibility rules, and protect benefits for eligible Americans, while ensuring States administering Federal benefits programs do the same," the administration said at the time.
VANCE REFERS TIM WALZ, MINNESOTA ATTORNEY GENERAL TO DOJ FOR CRIMINAL INVESTIGATION OVER STATE'S ALLEGED FRAUD
The DOJ said its effort to eliminate fraud in New York is unique, and that rather than simply sending national unemployment insurance experts to states, the agency is now embedding Office of the Inspector General special agents on the ground to work with the New York State Department of Labor on criminal referrals and investigations.
"Never before has the U.S. Department of Labor and our Office of Inspector General unleashed this level of coordination in the war on fraud," D'Esposito said. "Our elite strike teams — powered by top national unemployment insurance experts and OIG special agents — are embedded on the ground in New York to hunt down every lead and dismantle suspected fraud."
"Combined with President Trump and Vice President Vance’s White House Task Force to Eliminate Fraud, this collaboration has forged the most aggressive and advanced strike teams we have ever assembled."