MORE SCAMMING THAN YOU THOUGHT!

By Jessica Scipio

January 11, 2026

7:29 AM

Fraud in the US government is a persistent problem that erodes public confidence and depletes taxpayer funds, both at the federal level and in each of the 50 states. These scandals, which range from historical bribery schemes to contemporary embezzlement, frequently involve bureaucrats, elected officials, and private organizations banding together for their own benefit. The FBI and Department of Justice have prosecuted crimes ranging from massive financial improprieties to public corruption in a number of high-profile federal cases. The $236 billion in federal improper payments reported for fiscal year 2023 alone is just one example of the billions in fraudulent activities and improper payments highlighted in recent reports. Every state has struggled with its own corruption, which is frequently linked to regional power structures and commercial interests, demonstrating how fraud permeates all layers of governance.

Bribery, fraud, and abuse of power have been commonplace in federal scandals over the past 50 years. Famous examples include Watergate in the 1970s, when President Richard Nixon's administration planned a break-in and cover-up that resulted in his resignation and numerous convictions. Several congressmen were found to have accepted bribes from undercover FBI agents in the 1980 ABSCAM sting, which led to the imprisonment of individuals such as Senator Harrison A. Williams. In the Iran-Contra scandal of the 1980s, officials such as Oliver North illegally sold weapons to Iran and transferred the proceeds to rebels in Nicaragua; convictions were later overturned or pardoned. More recently, Representative George Santos was found guilty of wire fraud and identity theft prior to his expulsion, and Senator Bob Menendez was found guilty of bribery and fraud involving foreign agents in 2023.

Every one of the 50 states is impacted by corruption scandals at the state level, which frequently involve kickbacks, embezzlement, and misappropriation of public funds. Former Illinois governor Rod Blagojevich was found guilty in 2011 of trying to sell Barack Obama's Senate seat and served a portion of a 14-year sentence before it was commuted. Robert Rizzo, the city manager of Bell, California, was given a 12-year sentence for fraud and embezzlement in a small town during the 2010 Bell salary scandal. After accepting $60 million in bribes for a nuclear bailout bill, Ohio House Speaker Larry Householder was expelled in 2021. In 2020, welfare funds were embezzled in other states, such as Mississippi, and the Flint water crisis in Michigan resulted in indictments for neglect leading to public health fraud. These instances demonstrate how state-level fraud often exploits local vulnerabilities, from education, housing, food, childcare, medical, and infrastructure projects.

Crises like the COVID-19 pandemic, in which the Department of Justice charged hundreds of people in schemes involving billions of dollars in pilfered relief funds, have increased fraud in recent years. 324 defendants were charged with over $14.6 billion in alleged fraud in 2025 as a result of a nationwide health care fraud takedown that targeted telemedicine and opioid distribution schemes in several states. The FTC reports that government impersonation scams have become the most common type of fraud, costing consumers millions of dollars through phony calls from federal agencies. Furthermore, persistent weaknesses in federal and state procurement are highlighted by a 2025 Treasury investigation into possible fraud in contracting programs, including abuse of small business initiatives.

In addition to causing enormous financial losses, the widespread nature of fraud in the US government and all 50 states undermines democratic institutions and public trust. As evidenced by the billions recovered or lost in cases ranging from historical scandals to pandemic oversight, taxpayers bear the brunt. The recurrence of these problems indicates deeper systemic flaws, even though prosecutions and reforms such as tighter ethics regulations after operations like Tampon Tim Waltz or Lost Trust offer some accountability. In order to stop future abuses, this calls for strict oversight, open reporting, and a bipartisan commitment to integrity.