Stolen IDs sold for ‘Happy Meal’ prices fuel billions in US benefit fraud

Buying a stolen identity can cost less than a fast-food meal, enabling criminals to use AI and internet tutorials to file fraudulent benefit claims from anywhere in the world, a former inspector general warned Congress on Wednesday.

Lawmakers are already ramping up scrutiny of fraud in major federal aid programs — including unemployment, Medicaid and food assistance — as criminals leverage AI, stolen identities and online tools to exploit systems and drain billions in taxpayer dollars.

Federal watchdogs previously estimated that more than $100 billion in pandemic-era unemployment benefits alone may have been lost to fraud, much of it tied to weak identity verification and oversight gaps.

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“The internet has reduced barriers to fraud,” said retired inspector general Bob Westbrooks during a House Oversight Committee hearing on fraud in federally funded state programs.

“Offenders can find free tutorials online, purchase stolen identities for the price of a Happy Meal, and file claims from anywhere in the world. With automation tools, they can even submit multiple claims across multiple states,” added Westbrooks, who spent nearly three decades in public service focused on anti-fraud efforts.

He warned that “the prevalence of fraud discussions online normalizes this behavior and reduces the fear of getting caught and punished.”

Massive fraud schemes in recent years have underscored the scope of the problem, including a $250 million “Feeding Our Future” case in Minnesota that resulted in dozens of convictions, and a roughly $100 million welfare scandal in Mississippi that led to criminal charges and high-profile prosecutions.

The issue has become so glaring that President Donald Trump appointed Vice President J.D. Vance as the new ‘fraud czar’ and tasked him with addressing taxpayer theft – especially in blue states where local officials refuse to cooperate with the administration.

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Other auditors and federal officials have pointed to systemic weaknesses in benefit programs, including payments to deceased individuals, duplicate claims filed across multiple states and limited real-time verification of eligibility.

“There’s no one-size-fits-all solution,” Westbrooks said, noting the complexity of policing massive federal programs.

“To be frank, it is simply impossible or impracticable to design a 100% fraud-proof program,” he added.

Still, Westbrooks emphasized that fraud should not be accepted as a cost of doing business.

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“The American public should reasonably expect that public money is not used to pay dead people, incarcerated individuals, or duplicate claims in the same state or across states, and that public funds are otherwise appropriately safeguarded,” Westbrooks said.

“Officials should aggressively but responsibly adopt new technology tools in the fight against fraud.”

He added that safeguarding taxpayer dollars will require “a coordinated and comprehensive, risk- and data-driven approach” to reduce losses and restore public trust.