Labor Dept. demands banks freeze nearly $1B in fraudulent COVID benefits
The Labor Department has requested banks to freeze nearly $1 billion in fraudulent unemployment benefits linked to the COVID-19 pandemic. This action affects accounts across at least 12 states and aims to preserve funds until the end of 2026. Officials are working to recover stolen funds and hold those responsible accountable.
- ▪The Labor Department demanded banks freeze almost $1 billion in fraudulently obtained unemployment benefits.
- ▪The bogus benefits included $720 million on prepaid debit cards and $192 million unclaimed in state property offices.
- ▪The investigation has led to 1,800 convictions and $2.2 billion in recovered funding.
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Politics exclusive Labor Dept. demands banks freeze nearly $1B in fraudulent COVID benefits By Josh Christenson Published May 21, 2026, 5:42 p.m. ET See more of our coverage in your search results. Add The New York Post on Google WASHINGTON — The Labor Department demanded Thursday that banks freeze almost $1 billion in fraudulently obtained unemployment benefits made available during the COVID-19 pandemic. All accounts at the institutions, which span at least 12 states including Illinois, California and New York, are requested to be preserved until Dec. 31, 2026, officials said. The financial institutions are also being asked to “cooperate proactively” with the department’s investigators to preserve the funds.
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