Trump's Labor Chief Warns States Over Unemployment Fraud Issues
WHO:
The Independent - Acting Labor Secretary Keith Sonderling warned governors of 53 states and territories.
ABC News - Vice President JD Vance is overseeing an anti-fraud task force.
ABC News - California Governor Gavin Newsom's office criticized the Trump administration's actions.
WHAT:
Fox Business - Acting Labor Secretary Keith Sonderling stated that New York is paying over $2 million a day in improper payments related to unemployment insurance.
Fox Business - California owes more than $20 billion to a trust fund for unemployment insurance.
Fox Business - States including New York, New Jersey, Pennsylvania, Massachusetts, and Illinois paid more than $2.5 billion in improper payments last year.
The Independent - Vice President JD Vance's task force has withheld $1.4 billion in federal funding after a crackdown on fraud operations in California, Minnesota, and other states.
The Independent - The Trump administration announced a nearly $1.8 billion compensation fund for the president’s allies, which the Department of Justice claims has been abandoned.
The Independent - The Trump administration is threatening to withdraw federal funding for unemployment assistance in all 50 states.
The Independent - Nearly 2 million people are currently receiving unemployment benefits, with approximately 229,000 initial jobless claims filed weekly.
ABC News - The U.S. Department of Labor told states to combat fraud, waste, and abuse in their unemployment insurance programs or face penalties, including withholding administrative funds.
ABC News - The Government Accountability Office estimated that fraud accounted for between 11% and 15% of unemployment insurance payouts from April 2020 through May 2023.
WHERE:
The Independent - The actions affect all 50 states and territories.
ABC News - Specific issues were cited in California, Illinois, and New York.
WHEN:
The Independent - The unemployment rate peaked at 14.8 percent in April 2020.
ABC News - The Department of Labor stated that further directives would be issued in the coming weeks.
WHY:
The Independent - Advocacy groups and members of Congress have accused the Trump administration of disguising a campaign to slash social services under the guise of an "anti-fraud" enforcement initiative.
The Independent - The Trump administration's actions are part of a nationwide campaign against “fraud” in government spending.
ABC News - The Labor Department cited poor oversight, outdated technology, weak identity verification, and lax controls as reasons for the fraud.
HOW:
Fox Business - The Department of Labor, in partnership with the Office of the Inspector General, will use every available enforcement tool to ensure compliance in protecting unemployment insurance system integrity.
ABC News - The Department of Agriculture has threatened to withhold administrative funds from states that do not provide data on participants in the Supplemental Nutrition Assistance Program, including their immigration status.
The Independent - The federal government plans to use “every available tool” to combat fraud, including withholding administrative funds from states for the first time in history.
ABC News - The Department of Health and Human Services attempted to withhold funds for child care subsidies from five states governed by Democrats but was rebuffed by a court.
(UPDATED June 18, 2026 06:38 UTC)
Acting Labor Secretary Keith Sonderling revealed that New York is currently spending over $2 million a day on improper payments related to unemployment insurance. Meanwhile, California is facing a staggering debt of more than $20 billion owed to its unemployment insurance trust fund, and states like New York, New Jersey, Pennsylvania, Massachusetts, and Illinois collectively paid over $2.5 billion in improper payments last year. In response to these issues, the Department of Labor, along with the Office of the Inspector General, plans to utilize every available enforcement tool to maintain the integrity of the unemployment insurance system.
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(UPDATED June 18, 2026 01:48 UTC)
Vice President JD Vance's task force has withheld $1.4 billion in federal funding following a crackdown on fraud operations in several states, including California and Minnesota. Meanwhile, the Trump administration has announced a nearly $1.8 billion compensation fund for the president’s allies, which the Department of Justice claims has been abandoned. Advocacy groups and members of Congress are accusing the administration of masking a campaign to cut social services under the pretense of an "anti-fraud" enforcement initiative, while the Department of Agriculture has threatened to withhold administrative funds from states that fail to provide participant data for the Supplemental Nutrition Assistance Program.
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(UPDATED June 17, 2026 23:28 UTC)
Acting Labor Secretary Keith Sonderling has issued a warning to governors across 53 states and territories, as the Trump administration threatens to withdraw federal funding for unemployment assistance affecting all 50 states. Nearly 2 million people are currently receiving unemployment benefits, with around 229,000 initial jobless claims filed each week, while the U.S. Department of Labor has instructed states to address fraud in their unemployment insurance programs or risk penalties, including the withholding of administrative funds. The Government Accountability Office has estimated that fraud accounted for between 11% and 15% of unemployment insurance payouts from April 2020 through May 2023, prompting the administration to take unprecedented measures to combat this issue.