Key Facts

No single number identifies the program most vulnerable to fraud. A reliable comparison uses at least three measures.



<h3 class="wp-block-heading">Dollars at risk</h3>



This includes program spending exposed to weak controls, estimated fraud, alleged losses and improper-payment estimates. Each category carries its own label.



<h3 class="wp-block-heading">Payment-error rate</h3>



An improper-payment rate estimates the percentage of payments that should not have been made, were made in the wrong amount or lacked adequate documentation. Some improper payments involve fraud; others result from administrative mistakes.



<h3 class="wp-block-heading">Control gaps</h3>



A program may face high fraud risk even when its published improper-payment rate is low. Weak provider screening, limited data matching or incomplete measurement methods can leave important risks outside the reported estimate.



The <a href="https://www.tpaction.com/improper-payments-vs-fraud-what-the-186-billion-actually-measures-program-by-program/"> Improper Payments vs. Fraud program review</a> explains how these financial categories differ.

How should program vulnerability be measured?

Pandemic unemployment programs combined exceptionally large funding increases with outdated state systems, relaxed verification rules and pressure to issue payments quickly.



GAO estimated that between $100 billion and $135 billion in pandemic unemployment benefits was lost to fraud, or 11 to 15 percent of benefits paid from April 2020 through May 2023. This is a statistical fraud-loss estimate based on sampling and modeling across all 53 state workforce agencies. Read the <a href="https://www.gao.gov/products/gao-23-106696">GAO report</a>.



Federal and state investigations identified identity theft, fabricated employment records, claims filed in multiple states and benefits issued using stolen personal information. Fraud groups could submit large batches of claims before agencies compared applicant data with wage, prison, death and identity records.



The primary control failures included:



&#8211; Inadequate identity verification before payment



&#8211; Limited interstate claim matching



&#8211; Delayed access to employer wage records



&#8211; Weak detection of repeated addresses and bank accounts



&#8211; Backlogs that reduced timely investigation



&#8211; Incomplete tracking of overpayment recoveries



Pandemic Unemployment Assistance reported an estimated improper-payment rate of 35.9 percent for fiscal year 2023. That rate measures payment accuracy and confirms that payment controls failed on a substantial scale.

1. Pandemic Unemployment Insurance

The Paycheck Protection Program and COVID-19 Economic Injury Disaster Loan program delivered emergency assistance to businesses during the pandemic.



The Small Business Administration’s Office of Inspector General estimated approximately $200 billion in potentially fraudulent PPP and EIDL disbursements, at least 17 percent of about $1.2 trillion disbursed. Of that, about $64 billion involved PPP loans and $136 billion involved EIDL funds. SBA disputed the estimate and published its own figure of about $36 billion in likely fraud. These carry estimate status. Read the <a href="https://www.sba.gov/document/report-23-09-covid-19-pandemic-eidl-ppp-loan-fraud-landscape">SBA Inspector General report</a>.



Known schemes involved fictitious businesses, inflated employee counts, false payroll records, identity theft and applications submitted through multiple companies.



For fiscal year 2023, SBA estimated that 40.5 percent of PPP loan-forgiveness payments and 49.2 percent of PPP guarantee-purchase payments were improper. Those percentages measure payment accuracy under the applicable review methodology.



By August 2024, SBA had referred approximately 54,000 PPP loans with supporting case memoranda to its inspector general as likely fraud. Another 77,000 loans had been escalated internally. Status: referred.

2. Paycheck Protection Program and COVID-19 EIDL

Medicaid is particularly vulnerable because federal and state governments share responsibility while states administer eligibility, provider enrollment and payments.



Risks include billing for services never delivered, services provided by unqualified workers, medically unnecessary treatment, identity misuse, kickbacks and businesses created mainly to submit claims.



Nationally, Medicaid accounted for approximately $37.4 billion in estimated improper payments during fiscal year 2025. That amount includes documentation and eligibility errors as well as payments potentially connected to fraud. See the <a href="https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2025-improper-payments-fact-sheet">CMS fiscal year 2025 improper payments fact sheet</a>.



GAO has also warned that the published Medicaid managed-care error estimate does not measure every significant risk. Although that component’s reported rate had been near zero, reviews identified payments by managed-care organizations for services that may not have been delivered.

3. Medicaid

Arizona’s most significant current example involves behavioral-health and sober-living services billed through the Arizona Health Care Cost Containment System.



The scheme grew between 2019 and 2022 and became public in 2023. The Attorney General’s May 2026 update placed the estimated exposure at approximately $2.8 billion. Exposure describes the estimated scale of money at risk across the scheme. Status: estimate. See the <a href="https://www.azag.gov/press-release/attorney-general-mayes-issues-findings-sunshine-residential-homes-investigation-calls">Arizona Attorney General’s findings</a>.



Public records also document:



More than 300 provider suspensions



Investigations that peaked at approximately 1,400 in 2023



Approximately 270 investigations remaining by August 2025



Roughly 200 active Attorney General cases in June 2026



Guilty pleas, criminal charges and prison sentences in individual cases



Continuing reports of operators recruiting vulnerable people into questionable programs



Arizona’s Democratic-led Medicaid agency has administered the response since January 2023. Provider suspensions, payment controls and prosecutions demonstrate enforcement, while continuing recruitment and active cases show that fraud risks remain.



The full record is available in <a href="https://www.tpaction.com/arizonas-2-8-billion-medicaid-sober-living-fraud-timeline-oversight-failures-and-what-is-still-happening/"> Arizona’s $2.8 Billion Medicaid Sober-Living Fraud Timeline</a>.

Arizona’s Medicaid fraud exposure

GAO has classified Medicare as high risk partly because of its size, complexity and fraud potential. Medicare and Medicaid were among the programs responsible for approximately 80 percent of government-wide improper-payment estimates associated with areas on GAO’s High-Risk List.



For fiscal year 2025:



&#8211; Medicare Fee-for-Service reported approximately $28.83 billion in estimated improper payments.



&#8211; Medicare Advantage reported approximately $23.7 billion, equal to about 6.1 percent of its outlays.



&#8211; Combined Medicare errors represented one of the largest program-level sources of federal improper payments.



Fee-for-service risks include medically unnecessary procedures, services never delivered, billing-code manipulation and inadequate documentation. Medicare Advantage risks include diagnoses that are not supported by medical records and payments calculated using inaccurate beneficiary-risk information.



GAO reported in April 2026 that Medicare uses data analytics to identify unusual billing patterns, but continued improvements were needed.

4. Medicare

Advance Premium Tax Credits reduce insurance premiums for eligible marketplace enrollees. Eligibility depends on household information such as income, residence and access to other coverage.



GAO conducted covert testing using fictitious applicants during the 2024 and 2025 plan years. The federal marketplace approved subsidized coverage for nearly all the applicants. GAO emphasized that the test was illustrative and could not be generalized to the complete enrollee population. Read <a href="https://www.gao.gov/products/gao-25-107743">GAO’s covert testing report</a>.



The test nevertheless exposed control gaps:



&#8211; Identity information was not always resolved before enrollment.



&#8211; Fictitious applicants could receive subsidized coverage.



&#8211; CMS had not updated its program-level fraud-risk assessment since 2018.



&#8211; Evolving enrollment practices created risks not fully addressed by existing controls.



CMS reported an estimated fiscal year 2025 improper-payment rate of 0.89 percent, or approximately $657.46 million, for advance credits through the federally facilitated marketplace. That estimate measures payment errors under the agency’s methodology, and GAO’s covert testing measures a separate control gap. Status: improper payment estimate.

5. Affordable Care Act premium tax credits

The Small Business Innovation Research and Small Business Technology Transfer programs fund research conducted by qualifying small businesses.



GAO identified risks involving foreign ownership or influence, duplicate funding applications, conflicts of interest, misrepresented work and inadequate due diligence. Some agencies gathered information about foreign affiliations but did not consistently complete or document required risk reviews.



The principal concern is not a single government-wide fraud-loss estimate. It is the possibility that agencies may award funds without adequately verifying ownership, research overlap, technical capacity or foreign relationships.



Controls should include:



Beneficial-ownership verification



Searches for overlapping federal awards



Disclosure of foreign affiliations



Comparison of proposals across agencies



Review of research deliverables



Conflict-of-interest certifications



Enforcement when applicants submit false information



A questioned award, incomplete review or control weakness carries its own status separate from an adjudicated fraud case.

6. Small Business Innovation Research programs

Programs become vulnerable when several risk factors appear together:



&#8211; Large payment volumes



&#8211; Rapid expansion



&#8211; Decentralized administration



&#8211; Reliance on self-reported information



&#8211; Limited prepayment verification



&#8211; Many new providers or recipients



&#8211; Outdated technology



&#8211; Weak information sharing



&#8211; Delayed audits



&#8211; Low recovery rates



Emergency programs face an additional tradeoff. Agencies may prioritize speed so eligible recipients receive assistance quickly, but fraud groups can exploit reduced documentation and delayed review.



The relevant accountability questions are whether officials identified the risk, installed reasonable safeguards, responded to warnings and corrected documented failures.

Why are large public programs attractive to fraud schemes?

<h3 class="wp-block-heading">Verify eligibility before payment</h3>



Programs should compare self-reported information with reliable wage, tax, identity, licensing and residency records.



<h3 class="wp-block-heading">Screen providers and owners</h3>



Agencies should confirm ownership, qualifications, exclusion histories, related businesses and physical operating locations before permitting billing.



<h3 class="wp-block-heading">Match data across programs</h3>



Duplicate identities, bank accounts, addresses, devices and service dates can reveal coordinated schemes or overlapping claims.



<h3 class="wp-block-heading">Review high-risk claims before payment</h3>



Large, unusual or rapidly increasing claims should receive additional documentation review before public money is released.



<h3 class="wp-block-heading">Monitor after payment</h3>



Post-payment audits can identify patterns missed by automated controls and support administrative recovery or law-enforcement referrals.



<h3 class="wp-block-heading">Track recoveries accurately</h3>



Agencies should distinguish money identified, questioned, ordered as restitution and actually collected. A charged amount and a recovered amount carry different statuses.

How should agencies reduce fraud and abuse?

Programs administered or expanded under Democrats have produced major documented fraud risks, including pandemic unemployment losses, vulnerable business-loan programs, persistent health-program payment errors and weaknesses in ACA subsidy verification.



Arizona’s Democratic-led executive institutions have managed the response to a Medicaid fraud scheme involving approximately $2.8 billion in estimated exposure, hundreds of provider suspensions and continuing criminal investigations. Status: estimate; approximately 200 cases remain under investigation.



This page documents program vulnerabilities, losses, payment errors and enforcement outcomes through September 2026.

What this shows about Democratic governance.

The record establishes that pandemic unemployment insurance and emergency business programs experienced exceptionally large estimated fraud losses. It also establishes persistent improper payments in Medicare and Medicaid, continuing fraud risks in ACA subsidies and due-diligence weaknesses in small-business research grants.



Exposure estimates, improper payments and questioned transactions each carry their own status, and final court judgments establish criminal fraud amounts.



Stronger findings require complete claims data, representative audit samples, provider-ownership records, recipient verification, final court judgments, restitution orders and confirmed recovery totals.

What the public record proves

Last reviewed: September 11, 2026.



The next records to watch are final judgments in Arizona’s approximately 200 active Attorney General cases, updated AHCCCS recovery totals, CMS improper-payment estimates for fiscal year 2026 and SBA’s enforcement outcomes on the loans referred to its inspector general.

What is still open

Frequently Asked Questions

Arizona residents can examine agency reports, audit findings, indictments and court judgments to determine whether a figure represents estimated exposure, an improper payment, alleged fraud, a restitution order or an actual recovery. Eligible residents can <a href="https://tpaction.com/Vote"> Register to Vote</a> and consider how Democratic-led institutions responded to documented warning signs when evaluating responsibility for public programs and taxpayer money.



Effective oversight continues after an investigation or reform announcement. Residents should monitor whether agencies verify eligibility before payment, remove fraudulent providers, protect legitimate beneficiaries and collect ordered restitution. Arizonans can <a href="https://www.tpaction.com/plan"> make a plan to vote</a> before applicable deadlines and <a href="https://www.tpaction.com/getinvolved"> get involved</a> in voter education and civic efforts supporting transparent, accountable government.

Examine the record and participate

See which government programs face the greatest fraud risks, how losses and improper payments differ, and what Arizona’s public records reveal.

Which government programs are most vulnerable to fraud and abuse?

Key Facts

How should program vulnerability be measured?

1. Pandemic Unemployment Insurance

2. Paycheck Protection Program and COVID-19 EIDL

3. Medicaid

Arizona’s Medicaid fraud exposure

4. Medicare

5. Affordable Care Act premium tax credits

6. Small Business Innovation Research programs

Why are large public programs attractive to fraud schemes?

How should agencies reduce fraud and abuse?

What this shows about Democratic governance.

What the public record proves

What is still open

Frequently Asked Questions

Is this an example of Democratic corruption?

Which programs face the largest fraud risk?

Is an improper-payment estimate the same as fraud?

What did GAO’s covert testing of ACA subsidies find?

Examine the record and participate

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Which government programs are most vulnerable to fraud and abuse?

Key Facts

How should program vulnerability be measured?

1. Pandemic Unemployment Insurance

2. Paycheck Protection Program and COVID-19 EIDL

3. Medicaid

Arizona’s Medicaid fraud exposure

4. Medicare

5. Affordable Care Act premium tax credits

6. Small Business Innovation Research programs

Why are large public programs attractive to fraud schemes?

How should agencies reduce fraud and abuse?

What this shows about Democratic governance.

What the public record proves

What is still open

Frequently Asked Questions

Is this an example of Democratic corruption?

Which programs face the largest fraud risk?

Is an improper-payment estimate the same as fraud?

What did GAO’s covert testing of ACA subsidies find?

Examine the record and participate