Program Integrity Alliance Statement on the Creation of the National Fraud Detection Center

The Program Integrity Alliance welcomes the creation of the Department of Justice's National Fraud Detection Center. The DOJ-led multi-agency team enables cross-program visibility to identify and investigate fraud. For too long, the federal government has fought fraud program by program and agency by agency, while sophisticated fraud networks operate across those boundaries. Bringing together data, analytical capabilities, Inspectors General, law enforcement, federal agencies and state partners is an important step toward closing that gap.

The Center's emphasis on cross-program visibility is particularly important. The same identities, addresses, bank accounts, businesses and criminal networks can appear across multiple government programs, yet the government has historically lacked the infrastructure to see those connections quickly and act on them.

But visibility built for prosecutors arrives after the money is gone. The NFDC is designed to generate criminal leads once fraud has already occurred, not to stop the payment before it goes out. Those are different jobs, and the government is building capacity for only one of them.

Closing that gap requires prevention infrastructure the NFDC was not designed to provide. PIA's Integrity Blueprint has argued that the government needs a single, authoritative way to know who it is paying, resolved once and shared across every program, rather than the current patchwork of agencies each verifying the same people separately and often too late to matter. The same identity connections the NFDC will spend months reconstructing case by case could instead be confirmed before a payment ever goes out.

And even when an agency does see a warning sign in time, the law gives it almost no room to act on it. Money that has been certified for payment generally has to move, regardless of what an agency's own systems are flagging. The Blueprint argues for closing that gap directly, giving agencies clear legal authority to pause a payment briefly when a credible fraud risk has been documented, paired with a fast, well-defined process so a legitimate beneficiary is never the one left waiting.

The government's own numbers already make the case for prevention over pursuit. Treasury's Do Not Pay system prevented, detected or recovered $652 million in fraud and improper payments in fiscal year 2023. Two years later, after wider adoption, that figure reached $11.7 billion, an eighteen-fold increase, using a tool that already existed and simply reached more payments before they went out the door. Fewer than one in ten federal programs use it fully today.

Compare that to what happens on the other side of the ledger. GAO estimates that fraud across pandemic relief programs likely exceeded $300 billion. DOJ's own tally of what has actually been clawed back, seized or forfeited stands at roughly $1.4 billion, under half a percent of what was stolen. Prevention, where the government has actually invested in it, is producing results measured in the billions and growing fast. Pursuit, even with years of investigations and prosecutions behind it, is recovering pennies on the dollar.

The NFDC will make the government better at building cases, but it won’t make the government better at stopping the payment before there's a case to build. The US needs a stronger fraud enforcement architecture. But we also need a national fraud prevention architecture that is built to act on the same identities and networks before the money leaves, not after. Done well, the intelligence the NFDC generates should feed directly into that prevention infrastructure - but we believe that infrastructure is long overdue.