Welfare Fraud Deterrence and Recovery Act of 2026

Summary

Increases federal criminal penalties for knowingly making false statements that relate to federal welfare programs, including new mandatory minimum prison terms and a higher maximum sentence for serious fraud. Adds immigration consequences for fraud convictions (new deportability grounds, expedited removal applicability, post-denaturalization inadmissibility) and authorizes courts to revoke naturalization certificates when a naturalized person is later convicted of defrauding public benefit programs. Creates a Department of Justice Welfare Fraud Recovery Task Force to investigate, prosecute, and bring civil actions to recover funds lost to fraud in specified federal welfare programs; allows civil penalties, treble damages, cost recovery, whistleblower awards, and a dedicated recovery fund in the Treasury to reimburse programs and support enforcement activities. Requires interstate and international cooperation and permits withholding of up to 10% of federal welfare funds from states that fail to cooperate with investigations.

• Raises federal criminal penalty for false statements related to federal welfare programs to a 15-year maximum and creates mandatory minimum sentences (2 years for noncitizens/naturalized citizens; 5 years if $100,000+ obtained).
• Adds a deportability ground for fraud convictions, expands expedited removal applicability, and makes persons denaturalized for welfare fraud inadmissible for 20 years.
• Authorizes courts to revoke naturalization and cancel certificates when a naturalized person is later convicted of defrauding federal or state public benefits.
• Creates a DOJ Welfare Fraud Recovery Task Force to investigate and bring civil actions with remedies including $10,000–$20,000 civil penalties, treble damages, costs, and special penalties for noncitizens.
• Establishes a Welfare Fraud Recovery Fund to receive recovered monies, which HHS may use without further appropriation to reimburse programs and cover Task Force costs.
• Provides whistleblowers protections and awards equal to 15–30% of recoveries; allows states participating in joint investigations to receive up to 20% of recoveries.
• Requires interstate cooperation and enables federal agencies to withhold up to 10% of federal welfare funds from states that refuse to provide requested assistance.
• Authorizes international cooperation and use of MLATs, extradition, INTERPOL, civil forfeiture, and requires annual reporting to Congress on international enforcement and recoveries.
• Civil suits may be filed within the later of 15 years after the conduct or 3 years after discovery; appropriations are authorized as necessary for enforcement.