Kathy Hochul watched Nigerian crime rings and foreign syndicates drain $507 million from New York's unemployment system in 2025.
Now Trump's elite strike force is on the ground in Albany – and Hochul has some explaining to do.
The Department of Labor just embedded federal agents inside New York State's own unemployment office to hunt down every fraud lead and build criminal cases from the inside.
New York's Fraud Numbers Are in a Class of Their Own
New York isn't just bad at stopping unemployment fraud. It's the worst in the country – by a wide margin.
The state carries a 15% fraud rate and a 23% improper payment rate – both the highest in the nation.
Of the $507 million in overpayments paid out in 2025, New York has clawed back just 25%.
The national average is 69%.
That gap isn't incompetence.
https://twitter.com/77WABCradio/status/2077361858537771191?s=20
That's a state government that stopped trying.
DOL Inspector General Anthony D'Esposito didn't mince words about what he found when his team arrived.
"New York has exhibited fraud and improper payment rates on a scale we've never seen before – draining nearly $2 million a day from hardworking American taxpayers," D'Esposito said.
Two million dollars. Every single day. Stolen.
While Hochul was holding press conferences about 3D-printed gun parts, foreign crime syndicates were wiring New York taxpayer money overseas.
This Isn't a Review – It's an Invasion of Federal Agents
What the Trump administration deployed to New York is different from anything the federal government has done before.
Previous fraud reviews sent unemployment insurance experts to advise state agencies.
This time, the DOL embedded Office of Inspector General special agents directly inside the New York State Department of Labor to make criminal referrals on the spot.
"Never before has the U.S. Department of Labor and our Office of Inspector General unleashed this level of coordination in the war on fraud," D'Esposito said. "Our elite strike teams – powered by top national unemployment insurance experts and OIG special agents – are embedded on the ground in New York to hunt down every lead and dismantle suspected fraud."
https://twitter.com/RepTenney/status/2077051230438764797?s=20
That's not a compliance review.
That's a federal criminal investigation running out of Hochul's own building.
Hochul's Office Responded – and Said Absolutely Nothing
When Fox News Digital asked Hochul's office for comment, they got the most New York Democrat answer imaginable.
"Governor Hochul and the State Department of Labor take fraud and abuse very seriously. That's why the Governor has led the way in implementing several changes since the pandemic to fight waste, fraud and abuse."
She's been implementing changes. For five years.
While $507 million walked out the door in a single year.
New York's recovery rate is 25%. The national average is 69%.
After all those "changes" Hochul is so proud of, New York is still getting robbed at more than twice the rate of the average state.
The DOL's letter to Hochul in June made the stakes clear – fix the fraud problem or lose federal administrative funding.
https://twitter.com/NassauExec/status/2077497319700734404?s=20
For the first time in modern history, the Trump administration is willing to pull those funds from states that won't act.
Vance's Task Force Is Just Getting Started
Trump signed the executive order creating the White House Task Force to Eliminate Fraud in March and tapped Vice President JD Vance to lead it.
The task force put every governor in America on notice in June.
Hochul got the letter.
And still, New York's numbers are the worst in the country.
That's why federal agents are now sitting inside her state agency.
Here's what this money actually looked like when it was being stolen.
Nigerian crime rings used dead Americans' Social Security numbers to file fake unemployment claims – sometimes hundreds from a single email address with a period moved around to fool New York's fraud filters.
Chinese and Russian criminal syndicates bought stolen identities off dark web forums for next to nothing and wired the proceeds overseas before Albany even noticed a claim had been filed.
The DOL's Inspector General put the fraud figure at more than $76 billion – outside experts put it as high as $400 billion – making it the single largest theft of American taxpayer dollars in history.
https://twitter.com/MichaelARothman/status/2077172944498049121?s=20
New York was one of their favorite targets.
And nobody stopped them.
Every Governor in America Is Watching What Happens Next
The Trump administration has now embedded federal agents inside a Democrat governor's own agency and is threatening to cut off administrative funding to any state that won't get serious.
Forty-nine other governors just watched that happen to Hochul.
Every one of them knows Trump isn't bluffing.
Vance already referred Tim Walz to the DOJ for criminal investigation over Minnesota's $350 million Feeding Our Future disaster.
New York's number is $507 million – in a single year.
If Walz earned a criminal referral, what does Hochul deserve?
The era of Democrat governors running unemployment systems like personal slush funds – with Nigerian syndicates as silent partners and Biden looking the other way – is over.
Trump is hunting every dollar.
And the agents are already in the building.
Sources:
- "Trump's Labor strike force deploys to New York to weed out staggering $2 million per day in fraud," Fox News Digital, July 15, 2026.
- U.S. Department of Labor, "US Department of Labor demands immediate action from governors on unemployment insurance fraud," DOL Newsroom, June 17, 2026.
- Andrew G. Biggs, "Trump Takes Dramatic Step Toward Curbing Rampant Fraud in State Unemployment Programs," American Enterprise Institute, July 13, 2026.
- U.S. House Ways and Means Committee, "Three Key Moments: Hearing on Prosecuting Fraudsters for Stealing Billions in Pandemic Unemployment Benefits," Ways and Means, February 10, 2025.
- U.S. House Committee on Oversight and Accountability, "Oversight Committee Releases Report on Rampant Waste, Fraud, and Abuse in Pandemic Unemployment Relief Programs," September 26, 2024.
