▶ Key Takeaways
- Government benefit programs create incentives for individuals and organized groups to exploit program rules for financial gain.
- Fraud schemes have emerged in unexpected areas such as foreign student work authorization programs, employment visa programs, pandemic relief initiatives, and disaster loan programs.
- Fraud in immigration-related programs such as OPT and H-1B visas can create unfair labor-market advantages for foreigners and negatively impact employment opportunities for American workers.
- COVID-19 relief programs distributed funds at unprecedented speed and scale, creating opportunities for large-scale fraud involving unemployment benefits, business loans, healthcare claims, and other emergency assistance programs.
- Healthcare-related fraud remains one of the largest sources of government program abuse, including fraudulent billing, kickbacks, phantom providers, and fabricated patient services.
- Many fraud cases go undetected because government agencies often rely on self-reported information, and verification usually follows payment rather than preceding it.
- Additional regulations alone won’t eliminate fraud; structural reforms are necessary to reduce incentives for abuse.
- One strategy is to shift responsibility for administering assistance programs to state and local governments, where oversight can be more direct and accountability more immediate.
In the past 5 years, $500 billion of your hard-earned tax dollars have been stolen by professional fraud operators.
That’s half a TRILLION dollars!
And it’s still happening… faster than it can be uncovered and stopped.
Here’s how they’re stealing from you…
When government offers to give money away under certain conditions and criteria, it creates an incentive.
The incentive is to figure out how to satisfy the conditions necessary to receive the “giveaway.”
The incentive grows uncontrollably due to two inherent “side effects” of government welfare programs:
- Because the source of the funding is far removed from the recipients of the funds, organized groups are attracted who treat fraud as a business opportunity.
- The added bureaucracies needed to manage the programs lack the information required to police the programs.
Enforcement of the qualification requirements – and the elimination of fraud – quickly becomes a perpetual game of catch-up.
Here are a couple of examples:
- Medicare and Medicaid payments are made to providers after services are supposedly rendered, making them vulnerable to fabricated or exaggerated claims.
- Child nutrition and social service programs reimburse nonprofit organizations based on reported activity, not market demand.
The structure of the welfare system itself encourages inflated and fabricated claims and discourages rigorous verification.
Last week we looked at fraud in:
- The Food Stamp Program (SNAP)
- Child assistance programs
- Medicare and Medicaid
- Home healthcare
This week we will examine fraud in 4 other areas where you would least expect to find it:
1. Home healthcare fraud.
Last week we barely scratched the surface of the massive amount of home healthcare fraud in Columbus, Ohio.
Home healthcare and hospice fraud has been found in nearly every state.
In addition to Ohio, federal watchdogs have identified 4 states as centers of systemic fraud:
- Texas – ranks among the highest for Medicare/Medicaid fraud via fraudulent billing and kickbacks to assisted living facilities.[i]
- California – federal investigators have found “phantom” hospices and sham home care facilities in Los Angeles and Orange counties.[ii]
- Florida – a major hub for Medicare billing fraud, including unnecessary lab tests, falsified medical histories and kickbacks.[iii]
- Arizona – a major hub for fraudulent Medicaid billing schemes by behavioral health providers and addiction treatment facilities.[iv]
On June 30, 2025, the Justice Department announced the largest National Health Care Fraud Takedown in history.
A total of 324 defendants were charged in fraud schemes amounting to $14.6 billion in losses.[v]
Among the defendants were 96 doctors, nurse practitioners, pharmacists and other licensed medical professionals scattered across 12 states.[vi]
Meanwhile in Columbus, Ohio, Omega Healthcare Services claims it sends helpers to the homes of elderly clients.
For this Medicaid-billed activity, Omega has received $5.7 million of Ohio’s Medicaid funds between November 2020 and May 2026.[vii]
But when investigative reporters visited the Omega office during business hours, the door was locked and no one was there.
The business is registered to an immigrant from Ghana, who a decade ago had a daycare business in Wisconsin shut down because it was “unable to provide investigators with requested attendance records.”[viii]
The LLC paperwork for Omega Healthcare didn’t list the immigrant’s husband – who operates an accounting firm in the same building – but rather an 18-year-old white American male who lives two hours away from Columbus.
The husband had previously pleaded guilty in federal court to felony theft of public money for falsely claiming that 25 volunteers in his “community development” nonprofit filed tax returns for 1,000 elderly people, for which he billed the government for $16,000 in expenses.
His accounting license had been revoked, and he had been sentenced to 4 months of house arrest and 3 years of probation.[ix]
The Ohio Department of Medicaid ignored many red flags when it approved Omega Healthcare Services to operate in the home health field.
Omega is just one of 3,700 home health LLCs incorporated in Ohio, which spent $1 billion on home healthcare in 2024 – most of which was federal tax dollars.
2, Foreign student Optional Practical Training (OPT) fraud.
The Optional Practical Training (OPT) program is a work authorization program for foreign students attending U.S. colleges and universities on a F-1 student visa.
It allows foreign students in a degree program to work in their area of study for up to one year – either while attending school – or after graduation.
If the student obtains a degree in a STEM field – Science, Technology, Engineering, or Math – a two-year post-OPT extension is available.[x]
The program is run by the U.S. Citizenship and Immigration Services (USCIS).
Federal investigators report that the OPT program has “become a magnet for fraud,” and that it has exploded nationwide.[xi]
How?
Employers set up fake businesses, post legitimate-looking but fake jobs on web sites to attract students to sign up.
Some employers charge fees to students to find them “jobs” that match their degree program, and to maintain their F-1 student visa status after they graduate.
Acting ICE Director Todd Lyons stated at a recent press conference that investigators have identified over 10,000 foreign students linked to 25 “highly suspect” OPT employers.[xii]
Investigators have visited work sites in Florida, Georgia, Illinois, New Jersey, New York, North Carolina, Texas and Virginia.
They found empty buildings with locked doors where hundreds of foreign students were supposedly working.
John Connick, Executive Associate Director of Homeland Security Investigations (HIS) said investigators recently visited 18 OPT sites in North Texas.
They found “coordinated employer clusters” operating from the same building complexes.[xiii]
“We found shell company schemes,” Connick explained, “where multiple OPT employers are established by the same owner operator.”[xiv]
While OPT program fraud doesn’t directly misappropriate taxpayer funds, what it does do is just as dishonest:
- It allows foreign students to illegitimately stay in the U.S. with an F-1 student visa for up to 3 years after they have graduated and earned their degree.
- It provides them with fraudulent work experience to add to their resumes, which gives them an unfair advantage in seeking employment.
- It can lead to the fraudulent attainment of an H1-B visa, which gives them further unfair advantages in obtaining U.S. employment, and denies employment to qualified Americans.
3. Fraud in the H-1B Visa program.
An H-1B visa is a temporary employer-sponsored visa that allows U.S. companies to employ nonimmigrant foreign persons in “specialty occupations.”[xv]
U.S. employers must petition U.S. Citizenship and Immigration Services (USCIS) for H1-B visas for any foreign employees it wants to hire.
An H1-B visa lasts for 3 years and can be extended for an additional 3 years.
Congress sets an annual limit on the number of new H-1B visas that can be issued each year.
The current limit is 65,000 – with an additional 20,000 reserved for those who have earned a U.S. Master’s degree or higher.
The rules for applying for and receiving an H1-B visa are complex and beyond the scope of this article.[xvi]
The minimum requirement is a U.S. Bachelor’s degree in the specialty occupation – usually a STEM field or medicine.
The degree requirement is where the fraud incentive comes into the picture.
Manav Bharti University (MBU) – based in India – has sold as many as 36,000 fake degrees over the past 11 years for less than $5,000 each.[xvii]
Even worse, U.S. employers accepted the fake degrees!
Think about the consequences:
- Tech companies are passing over American college graduates for foreign applicants with fake degrees and fake work experience.
- By allowing the prioritization of H-1B visa holders in STEM fields, the market has been flooded with foreigners while devaluing degrees in STEM for American college grads, leaving many of them unemployed.
- H-1B visa holders with fake degrees don’t compare in quality to American workers with American degrees.
This puts the U.S. tech industry at risk of massive computer program bugs, cloud malfunctions and cybersecurity failures.
According to the Bureau of Labor Statistics, 90% of the net gain in American jobs since the COVID pandemic has gone to foreign workers.[xviii]
In December 2025, Shopify – a user of H-1B tech labor – experienced a massive glitch that halted their ability to process transactions.
It happened on Cyber Monday – the busiest day of the year for online sales.
Thousands of small businesses could not process orders.
This is the price we are paying for allowing India to abuse the H-1B visa program.
4. Past fraud that occurred in COVID pandemic testing and unemployment programs.
The COVID pandemic gave birth to a plethora of government relief programs.
All of these relief programs created massive opportunities for organized fraud schemes.
Although the programs ended in 2021 and 2022, many of the fraud schemes were not uncovered and prosecuted until this year.
The individual cases are too numerous to mention in this article.
Here is a brief summary…
Prosecutors in Minnesota have charged people in a wide range of fraud schemes involving:
- Pandemic unemployment benefits
- Economic injury disaster loans
- Transportation programs
- Autism-related health services[xix]
In Texas, defendants have been convicted of multi-million dollar disaster relief fraud.[xx]
In Massachusetts, various companies have paid back millions for Paycheck Protection Program[xxi] (PPP) loan fraud and for emergency rental assistance fraud schemes.[xxii]
Department of Justice (DOJ) press releases from 2026[xxiii] document many cases of fraud:
- Medicare COVID testing fraud
- PPP and COVID-19 Economic Injury Disaster Loan (EIDL)[xxiv] fraud
- Unemployment insurance fraud
- False claims against federal health care benefit programs
Government watchdogs estimate staggering amounts of fraud related to the COVID pandemic:
- Over $100 billion in pandemic unemployment programs
- Over $200 billion in fraudulent PPP and EIDL claims[xxv]
For every fraud case that is uncovered and prosecuted, many others escape detection.
Government welfare systems – especially during an economic crisis such as a pandemic – operate at a scale and at a speed in which fraud becomes organized, repeatable, and profitable.
5. How to drastically reduce and perhaps even eliminate the incentives to abuse the welfare system.
The scope and scale of federal and state welfare fraud is mind-boggling.
It’s not caused by implementation flaws that can be fixed with more rules and regulations.
Ron Paul – former Republican Representative from Texas – believed that fraud could not be eliminated by better oversight alone.
He advocated for reducing the size and scope of programs that make fraud lucrative and difficult to uncover.
One possible strategy would be for federal programs to be shifted to states and counties through block grants.
Smaller government doesn’t eliminate dishonesty completely, but it greatly reduces the rewards for it…
And oversight is much more effective at a local level than at the national level.
What do you think? Email me at [email protected].
Action:
- Read “Medicaid Millions,” the Daily Wire 4-part series on fraud in the healthcare industry. Click HERE.
- As the 2026 midterms approach, research the candidates on your ballot and find out what their position is on eliminating welfare fraud
- Pray for wisdom and guidance in choosing which candidates to vote for. Use our voter guides. Click HERE. Scroll down for links to California, Tennessee, and Judges Nationwide.
- Get my book, The Deep State: 15 Surprising Dangers You Should Know. Read chapter 4 on “The Bloated Bureaucracy: Fat Paychecks, Socialist Ideology, Waste and Inefficiency.” Click HERE to order the book online.You can order the book on Amazon HERE.Or get the audiobook version HERE and on Kindle HERE.
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FAQs:
Q: Why are government welfare and assistance programs susceptible to fraud?
A. Government programs distribute large amounts of money through complex bureaucratic systems. Because payments are frequently based on reported activity and verification often occurs after funds are disbursed, fraudsters can falsify claims before authorities detect the abuse.
Q: What characterizes organized fraud?
A. Organized fraud involves a group of individuals working together, usually creating a phony business for the purpose of fraudulently billing the government through the entity.
Q: What is Optional Practical Training (OPT) fraud?
A. OPT fraud involves creating fake employers, fictitious job placements, or shell companies that allow foreign students on F-1 visas to maintain legal status without legitimate employment.
Q: How does OPT fraud impact American college graduates seeking employment?
A. Fraudulent OPT arrangements provide foreign workers with unauthorized work experience and visa benefits, potentially giving them an unfair advantage when competing for jobs against qualified American college graduates with STEM degrees.
Q: What is H-1B visa fraud?
A. H-1B visa fraud include thes use of fake academic credentials, fraudulent work experience, misrepresentation of job qualifications, or abuse of visa sponsorship requirements. This fraud undermines the integrity of the employment-based immigration system.
Q: What types of fraud occurred during COVID pandemic relief programs?
A. Major fraud in the hundreds of billions of dollars occurred involving pandemic unemployment assistance, Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loans (EIDL), healthcare reimbursements, and other emergency relief programs.
Q: Which states have seen the most fraud in healthcare services?
A. Healthcare fraud has been uncovered in nearly every state, but the states with the most systemic healthcare fraud are Ohio, Texas, California, Florida, and Arizona.
Q: Is there any remedy that can eliminate welfare fraud?
A. Policy advisors advocate decentralizing program administration through state or local oversight, reducing program complexity, increasing transparency, strengthening verification procedures, and improving accountability for both recipients and administrators.
About Craig Huey:
Craig Huey is a longtime direct-response marketing strategist and publisher who focuses on the intersection of faith, politics, culture, and economic freedom. He is president of ElectionForum.org and the founder of Creative Direct Marketing Group (CDMG), where his team has tested thousands of marketing variables and earned more than 100 industry awards. Craig publishes commentary at CraigHuey.com and co-hosts media projects that equip Americans
[i] https://docs.house.gov/meetings/GO/GO00/20260304/119003/HHRG-119-GO00-20260304-SD039.pdf
[ii] https://www.foxla.com/news/southern-california-medicare-fraud-8-cases-investigation#
[iii] https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-324-defendants-charged-connection-over-146
[iv] https://hospicenews.com/2026/01/12/cms-doj-aggressively-cracking-down-on-hospice-fraud
[v] https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-324-defendants-charged-connection-over-146
[vi] Ibid.
[vii] Luke Rosiak, https://www.dailywire.com/news/he-was-convicted-for-defrauding-the-government-now-medicaid-pays-his-wife-millions
[viii] Ibid.
[ix] Ibid.
[x] https://www.uscis.gov/working-in-the-united-states/students-and-exchange-visitors/optional-practical-training-extension-for-stem-students-stem-opt
[xi] Jennie Taer, https://www.dailywire.com/news/ice-makes-new-major-fraud-discovery-involving-10000-foreign-students
[xii] https://timesofindia.indiatimes.com/technology/tech-news/us-immigration-authority-and-ice-claim-opt-visa-fraud-involving-thousands-of-foreign-students-empty-offices-locked-buildings-and-/articleshow/131057743.cms
[xiii] Ibid.
[xiv] Ibid.
[xv] https://en.wikipedia.org/wiki/H-1B_visa
[xvi] For detailed information about the H-1B visa program, go to https://peterchu.com/blogs/medium-feed/what-is-h1b
[xvii] Carla Sands and Samantha Flanigan, https://www.westernjournal.com/somali-fraud-drop-bucket-compared-indian-fraud-scheme
[xviii] Ibid.
[xix] Patrick Frise, https://mises.org/mises-wire/fraud-policy-incentives-modern-welfare-state
[xx] Ibid.
[xxi] https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program
[xxii] Patrick Frise, op. cit.
[xxiii] https://www.justice.gov/archives/coronavirus/news
[xxiv] https://www.sba.gov/funding-programs/loans/covid-19-relief-options/eidl
[xxv] Patrick Frise, op. cit.