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COVID-19

Kansas Recovers Only 2.4% of Funds Lost to Unemployment Fraud During Pandemic

Strategic Insights

— 2 min read

Amid a massive surge in fraudulent unemployment payments during the COVID-19 pandemic, the Kansas Department of Labor has only been able to recover about 2.4% of the stolen funds. The state's labor secretary, Amber Shultz, told legislators that the recovery of $11 million from the total of $460 million in fraudulent payments is a small consolation, considering the daunting task ahead to track down the rest of the stolen funds.

Key Takeaways:

  • The Kansas Department of Labor processed $460 million in fraudulent unemployment payments during the pandemic, with $292 million coming from state funds and $168 million from federal funds.
  • The state has recovered about 2.4% of fraudulent funds, or $11 million, which is a small fraction of the total lost.
  • An initial 2021 audit put the number of fraudulent claims at $700 million, but the department later refined the numbers to $460 million.
  • The recovery effort has been hindered by the state's limited power to investigate, as the labor department can only prepare and recommend cases for prosecution.
  • Sen. Rick Billinger criticized the Kansas system, pointing out that Colorado, with a similar computer system, had a much lower number of fraudulent claims, around $73 million.
  • The U.S. Department of Labor estimates that between $100 billion and $135 billion in fraudulent claims were processed nationwide, with about 1.2% recovered.
  • The possibility of fraudsters being held accountable is dwindling as the five-year statute of limitations on fraud prosecution looms.
  • The U.S. House passed the Pandemic Unemployment Fraud Enforcement Act in March, which could extend the statute of limitations, but it has stalled in the U.S. Senate.

Statistics:

  • $460 million: Total fraudulent unemployment payments processed by the Kansas Department of Labor.
  • $292 million: Amount of fraudulent payments made from state funds.
  • $168 million: Amount of fraudulent payments made from federal funds.
  • $11 million: Amount recovered from fraudulent funds, representing 2.4% of the total.
  • $700 million (later refined to $460 million): Initial estimate of fraudulent claims in 2021.
  • $73 million: Number of fraudulent claims paid in Colorado, which has a similar computer system to Kansas.
  • $100 billion to $135 billion: Estimated nationwide fraudulent claims processed by the U.S. Department of Labor.
  • 1.2%: Percentage of fraudulent claims recovered nationwide.

Sources:

  • (Kansas Reflector screen capture of Kansas Legislature video) dated Jun. 10, 2025.
  • Amber Shultz, secretary of the Kansas Department of Labor, cited in the article.
  • Derek Helms, a department spokesman, cited in the article.
  • Sen. Rick Billinger, a Goodland Republican, cited in the article.
  • U.S. Department of Labor, cited in the article.

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