According to Bessent, fraud in the federal government could amount to $500 billion a year

Scott Bessent warned that the federal government could be losing between $200 billion and $500 billion annually to fraud. In dialogue with Nick Shirley, the content creator who uncovered the alleged fraud of public funds in Minnesota, the Treasury secretary explained how the Trump Administration is working to prevent tax fraud at the federal level.

Months after two episodes of possible public funds fraud drew national attention in Minnesota and Massachusetts, the White House announced the creation of the Fraud Elimination Task Force. More recently, the Department of Justice (DOJ) announced more cases in California, Florida and Nevada.

With JD Vance at the helm, the task force aims to work with agencies, state and local governments to end the waste of taxpayer money. Specifically, it targets programs intended to provide housing, food, medical and financial assistance.

In this context, Bessent spoke with Shirley about the scope of tax fraud in the federal government and the details of the plan to combat it.

The scope of fraud in the federal government

"And with all this fraud, how much money do you think the Government is giving or was giving each year to the fraudsters?" asked Shirley, to which the Treasury secretary responded as follows, "Well, we we think it could be a $250 to $500 billion, so roughly 10% of the total federal budget. And, you know, like I said, 20% of the whole GDP of The US, it goes through Washington.(...) Again, it's a complete loss of trust between our citizens."

To encourage the discovery of fraud, a section was created on the Treasury website where citizens can anonymously contribute information about fraud. In case an irregularity is discovered, these citizens will receive a percentage of the money they helped to rescue.

On the reasons for the existence of the fraud, Bessent mentioned the lack of traceability of the money and the lack of transparency. Particularly, he talked about the Biden Administration's handling of the funds for COVID-19: "They took down all the guardrails, and they never put them back. Bobby Kennedy said at the inaugural day of the anti-fraud task force that the vice president convened, said at HHS, they had 60 people charged with preventing fraud. The Biden administration has fired all of them. So, again, the real thing is to keep the money from going out the door to the fraudsters. Again, very difficult to recover it."

Finally, Bessent stressed the importance of coordinating work with other federal agencies to ensure that the money does indeed go where it needs to go. "The vice president has the has been tasked with, the fraud commission. At treasury, our lead effort is to integrate all the agencies and figure out where the money is going," he said.