The Department of Labor Inspector General has warned of a new class of online fraudsters dubbed “fraudfluencers” who exploit government programs and recruit others to commit fraud for a cut of the benefits. These individuals leverage social media to coordinate schemes, creating a cottage industry that thrives on exploiting vulnerable populations.
The inspector general described fraud as a deliberate betrayal of hardworking Americans, emphasizing that it is theft of taxpayer dollars and will be prosecuted. The inspector also warned that such fraud undermines public trust in government assistance programs.
An example is a former California Employment Development Department employee who used social media to invite followers to file fraudulent unemployment insurance, grant, and rent relief applications, claiming insider knowledge and stolen identities. The former employee promised access to benefits she was not qualified for, leveraging stolen identities to file false claims.
The influencer, with nearly 10,000 Instagram followers and over 1,500 on X, promoted schemes promising to help users claim up to
