Key Takeaways:
Sen. Joni Ernst introduced legislation to seize passports from fugitives fleeing with stolen money, joining a broader congressional push as federal fraud losses reach an estimated $233 billion to $521 billion annually.
Sen. Joni Ernst introduced the Preventing Fugitive Fraudsters Act on June 25, a bill allowing the government to revoke passports from individuals fleeing prosecution after stealing taxpayer money, as federal fraud losses reach an estimated $233 billion to $521 billion each year.
"We have a mandate to root out fraud and disembowel it," House Rules Chair Virginia Foxx said at a recent hearing, as Congress advances more than 20 anti-fraud measures this month.
The Government Accountability Office identified roughly $186 billion in improper payments across 64 federal programs in fiscal 2025, up $24 billion from the prior year. Cumulative improper payments since fiscal 2003 total roughly $3 trillion, according to the watchdog.
The bill targets a specific vulnerability: individuals who steal from federal programs and flee abroad. With midterm elections approaching, the anti-fraud push gives lawmakers from both parties a rare area of agreement, though the legislation's path through the Senate remains uncertain.
The Preventing Fugitive Fraudsters Act would authorize the State Department to deny or revoke passports for individuals who are fugitives from justice after defrauding federal programs. Ernst's office said the measure closes a loophole that allows fraudsters to escape prosecution by leaving the country with stolen funds.
The bill is part of a broader anti-fraud wave on Capitol Hill. The House has passed seven major fraud-fighting bills and 15 additional measures this month, spurred by a June 8 House Oversight Committee staff report accusing Minnesota Gov. Tim Walz and Attorney General Keith Ellison of failing to address widespread fraud in federally funded social programs. The committee referred the matter to the Justice Department.
Fraud's Growing Toll on Federal Programs
The GAO's December report found that improper payment rates vary widely by program. The Earned Income Tax Credit, Medicare fee-for-service, and unemployment insurance account for the largest shares of erroneous payments, the watchdog said. The $186 billion total for fiscal 2025 represents about 4.5% of total federal outlays for the programs reviewed.
The last time improper payments exceeded $200 billion was in fiscal 2021, when pandemic-era unemployment programs pushed the total to $281 billion, according to GAO data. That surge prompted Congress to create the Pandemic Response Accountability Committee, which identified more than $16 billion in fraud linked to Covid relief programs.
What the Legislation Means for Affected Industries
The bill targets fraud across all federally funded programs, with particular exposure for healthcare, unemployment insurance, and nutrition assistance — the three categories that account for the bulk of improper payments. Healthcare alone represents roughly half of all federal improper payments, driven by Medicare and Medicaid billing errors and fraud, according to the GAO.
Ernst, who chairs the Senate Homeland Security and Governmental Affairs Committee's investigations panel, said the legislation is a targeted response to a specific enforcement gap. "This is about ensuring that those who steal from American taxpayers cannot simply board a plane and disappear," she said in a statement.
The bill's introduction comes as the White House anti-fraud task force continues investigations into state-administered federal programs. The task force's findings could inform additional legislative proposals later this year.
This article is for informational purposes only and does not constitute investment advice.
