It's the most popular f-word in Washington: fraud.
And DOGE — the Trump administration's Department of Government Efficiency — has been tearing through federal agencies on the hunt for it.
But is DOGE looking in the right places?
The fraud we'll tell you about tonight is complex, pervasive and being carried out by transnational criminal organizations often using stolen identities to target U.S. taxpayers – costing the government hundreds of billions of dollars a year.
Linda Miller: To be honest, Elon Musk coming out and saying, "There is a huge amount of fraud," I welcome that message completely because finally, someone is actually saying this.
No one knows the ins and outs of government fraud better than Linda Miller. She spent a decade at the Government Accountability Office, tracking how taxpayer money is spent and misspent, and even wrote the rulebook on preventing fraud in federal programs.
Linda Miller: Fraud is willful deception. It involves willful deception. And-- and it has to be proven in a court of law
Cecilia Vega: Is DOGE conflating fraud with wasteful spending?
Linda Miller: Yes, often. You may not agree with what USAID does, you may not want to be investing American dollars in, you know, foreign fertilizer, for example, you may think that's the wrong thing to be spending money on, but that's not fraud.
Linda Miller
60 Minutes
Last year, the Government Accountability Office released a report estimating the federal government loses as much as $521 billion a year to fraud. But Miller and other fraud experts believe the number is higher.
Linda Miller: I believe the government is losing between $550 billion and about $750 billion a year. We're coming up close to the $1 trillion amount-- is lost, every year, to fraud.
Cecilia Vega: When most people think of government fraud, I imagine they're thinking somebody is claiming disability benefits when they're not actually eligible, somebody collecting food stamps when they're not actually eligible. Are those the biggest offenders?
Linda Miller: Not at all, not by a long shot. What we're really talking about is nation-state actors. We're talking about organized crime rings. We're talking about using vast amounts of stolen Americans' identities to monetize them for, you know, criminal activity.
The problem exploded during the pandemic – when the government rushed trillions of dollars into the economy to help struggling Americans.
Applications for relief programs moved online, making it easier for people to access aid, but with few safeguards, scammers, hackers and organized crime rings also cashed in.
In 2020, Miller was appointed to an independent watchdog committee that tracked how COVID relief money was spent.
Linda Miller: We could tell, right away, it was like, "Oh. Well, that's all gonna get stolen."
Cecilia Vega: You saw it coming?
Linda Miller: Oh, yeah. I mean, It was like they threw money in the air and just let people run around and grab it. The most egregious part is that a lot of the people who stole that money were foreign adversarial nation states.
Cecilia Vega: So who are they? Who are you talking about?
Linda Miller: We're talking about China. We're talking about Russia.
Cecilia Vega: Impersonating Americans, in a lot of cases?
Linda Miller: Yes. Right.
Bryan Vorndran: These are arguably digital gangs in the 21st century that are built off of having safe haven status meaning their governments are not gonna interrupt their activity even if it's illegal.
Bryan Vorndran, head of the FBI's cyber division
60 Minutes
Bryan Vorndran is head of the FBI's Cyber Division – he says these digital gangs are armed with a very important weapon.
Cecilia Vega: Is it true that the Social Security number of just about every single American is available for sale on the dark web?
Bryan Vorndran: That is a true statement. All of our personally identifiable information – name, date of birth, former addresses, social security number-- is available on the dark net and can likely be purchased.
Cecilia Vega: That's chilling.
Bryan Vorndran: Yeah. It's very much a way of our lives, though, right now.
Cecilia Vega: And purchased, I hear, for a little as two bucks apiece?
Bryan Vorndran: Yep. Very affordable.
Last year, the FBI unraveled one of the largest digital fraud cases in U.S. history, in which cyber criminals from around the world used stolen identities to pocket $6 billion in pandemic unemployment funds.
Bryan Vorndran: $6 billion is an enormous, enormous amount of money.
Cecilia Vega: Why is the government a target for this type of fraud?
Bryan Vorndran: Because of the massive amount of money that exists in the federal government and in the state government.
There is no official tally of how much COVID relief money was lost to fraud, but Miller estimates it's more than a trillion dollars —that's 1 in 5 dollars – making it the largest fraud loss in U.S. history.
Linda Miller: One of the things I found really disheartening is since then, I have-- I have talked to some folks who said, "Well, that was just the pandemic. We don't have to worry about it anymore."
Cecilia Vega: Was it?
Linda Miller: No. I mean, it's whack-a-mole. And they-- these guys are-- are paying close attention.They're seeing where better controls are being put in place. And then, they're going to where the controls still haven't been improved.
Cecilia Vega: What are the hot spots for fraud, right now?
Linda Miller: Disaster funding-- is a really big issue. When a disaster happens in the country, the fraud actors see where it's coming. They look at the zip codes. And they begin buying stolen identities, so that they can begin applying for disaster loans, disaster grants, on behalf of stolen identities.
The real Americans behind those identities? People like Rich and Deann Wilken – who survived the Los Angeles wildfires that tore through their Palisades neighborhood in January.
Deann Wilken: Everything on this side burned and the school on the other side also burned.
Rich and Deann Wilken
60 Minutes
They documented the devastation, showing the home they lived in for nearly 50 years, gone. All they have left are the few carloads of belongings they managed to take with them.
The Wilkens applied for disaster assistance from FEMA, carefully keeping a file and notebook with important information they'd need throughout the process.
Cecilia Vega: So as far as you know--
Rich Wilken: I was--
Cecilia Vega: --you've done everything you need to do. Help is on the way.
Rich Wilken: Help is on the way.
But help never came, so the Wilkens followed up with a FEMA representative at a disaster center and learned the personal information they'd used to set up their FEMA account had been changed.
Rich Wilken: She says, what's your Social Security number? OK. What's your date of birth? OK. And, uh, your address is such and such. And I said, no. Is your phone number start with area code such and such? And I said, no.
Cecilia Vega: What's going through your mind?
Deann Wilken: Yikes.
Rich Wilken: Yeah, W-T-F.
Deann Wilken: Well, and by that time, too, we had already had some of our other friends whose accounts were the same way. And we just go, "Oh not us too."
The Wilkens were told their account was locked due to suspected identity fraud. They've spent months waiting for FEMA to resolve their case, and it's unclear whether they will ever get any money.
Cecilia Vega: Where will you be in six months?
Rich Wilken: Here.
Cecilia Vega: Will you still have this folder in front of you?
Deann Wilken: Hopefully, it's been put way in the back of the filing cabinet.
It's not just one program. Where there's money, there's fraud — in unemployment, food stamps, disability, tax refunds— leaving Americans struggling to access what they're owed.
All the while, criminals are one step ahead, using AI tools like deepfakes – often of innocent people – to cover their tracks.
The man you see here is attempting to pass an identity check through the company ID.me to obtain a tax refund from the IRS. Or so it appears. Watch closely as he holds up a driver's license: there's a glitch, and you see a sliver of a different man's face.
You can hear someone speaking Mandarin in the background.
In some cases, suspected criminals are on the payroll of foreign governments…like China which employs a group the BI calls APT41 – APT for Advanced Persistent Threat.
In 202, APT41 carried out a highly sophisticated and unusual hack of at least six state governments.
Cecilia Vega: What would they want, hacking into state government programs?
Bryan Vorndran: They just wanna make money for themselves.
Cecilia Vega: Through the U.S. government?
Bryan Vorndran: Correct.
Cecilia Vega: Via American taxpayer dollars?
Bryan Vorndran: Correct. They s-- used stolen personally identifiable information and essentially created fraudulent unemployment claims, and then those proceeds were laundered through shell companies, and that money was sent back to these individuals in China.
Cecilia Vega: How much did they get?
Bryan Vorndran: Our best estimate is $60 million.
Cecilia Vega: $60 million over the course of how long?
Bryan Vorndran: Over the course of about two years.
Cecilia Vega: Wow. How much of that has been recovered?
Bryan Vorndran: Very little. Very little.
Cecilia Vega: And I assume never will be?
Bryan Vorndran: That's-- that's a likely outcome.
Cecilia Vega: And to be clear, this was money that was supposed to go to Americans in need, in a crime being carried out that has been linked to the Chinese government.
Bryan Vorndran: Correct.
Multiple law enforcement and national security officials told us China is a top destination for stolen taxpayer dollars but the schemes are so complex and difficult to investigate, the true losses are unknown.
Cecilia Vega: We've heard that attacks like this are continuing to this day. And it's not just APT41. There are hundreds of people involved. Do you believe that to be true?
Bryan Vorndran: I believe that there are sustained campaigns across this globe that are very well-resourced, with a goal of causing damage to the United States.
Cecilia Vega: Can you really catch a criminal in this arena that is operating in a place like China, Russia, North Korea, Eastern Europe?
Bryan Vorndran: We have plenty of examples-- where we have caught people from some of the countries that you mentioned
Cecilia Vega: I do think there's a perception though that some of these criminals are untouchable. They're impossible to get to.
Bryan Vorndran: Sure. I would agree with that.
Cecilia Vega: It also, respectfully, sounds like you're outnumbered.
Bryan Vorndran: In the U.S. government we're all outnumbered.
Cecilia Vega: Do you ever s-- feel like you're sort of screaming until you're blue in the face on this and no one is listening to you?
Linda Miller
60 Minutes
Linda Miller: Yes. Yes. I have worked with agencies, where when I sit down and talk to them, they say, "I'm gonna stop you, right there, because you keep saying, 'Fraud.' And that's-- that sounds so insidious. Is there another word we could use?" And I--
Cecilia Vega: Is there?
Linda Miller: Well, I say, "Well, what-- what's the word you'd prefer?" And they say, "Maybe, misappropriation."
Cecilia Vega: Does that make it better?
Linda Miller: Yeah. It sounds better. And-- you know, and what I usually say is, "It is insidious."
DOGE claims it has saved taxpayers more than $160 billion so far, sometimes citing examples of cost cuts that are inaccurate and later walked back.
A White House spokesman told us DOGE has been working on improving data sharing between agencies and that departments are collaborating to identify fraud and prevent criminals from exploiting taxpayers, saying, quote, "fraudsters will be held accountable."
Cecilia Vega: Watching DOGE, are you optimistic that real fraud reform will actually come?
Linda Miller: I — when I watch DOGE today, I do see some hints that they are addressing the right issues. But right now, I think the jury is still out on whether or not we're gonna get that kind of-- progress.
Cecilia Vega: Do you feel like you have to choose your words carefully, when you're talking about DOGE and Elon Musk?
Linda Miller: Yeah.
Cecilia Vega: Why?
Linda Miller: Um, because I really think fraud is not a political issue. This is mom and apple pie stuff. We all agree that bad actors should not be stealing American taxpayer dollars. But now, it's become political. People like me, and people in the law enforcement community, we see the adversary, not as Republicans or Democrats, but as foreign adversarial nation-states and organized crime rings. And I believe that there's opportunities for DOGE to save a lot of significant money, if they focus on the right things, if they focus on real fraud.
Produced by Ayesha Siddiqi and Kit Ramgopal. Broadcast associate, Katie Jahns. New associate, Mary Cunningham. Edited by Mike Levine.
Cecilia Vega