Statement on fraud risk and enforcement priorities in the U.S.

As the new U.S. presidential administration establishes its policies and enforcement priorities on fraud and financial crimes, Association of Certified Fraud Examiners (ACFE) members from around the world have asked for our position on the ways in which the administration is addressing the fight against fraud, waste and abuse.

In matters of politics, the ACFE has a longstanding policy against issuing public statements. We don’t believe it’s appropriate for us to advocate for or against causes or policies beyond our expertise as fraud examiners.

But as the world’s largest anti-fraud association, we stand ready, as always, to support the lawful and legitimate anti-fraud efforts of any administration, regardless of political affiliation. The stakes are simply too high not to.

In the ACFE’s Occupational Fraud 2024: A Report to the Nations, Certified Fraud Examiners (CFEs) estimate that the typical organization loses 5% of its revenues to fraud. That figure, when applied to the U.S. GDP in 2023, translates to more than $1.3 trillion in annual fraud losses in the U.S. alone.

Furthermore, in April 2024, the U.S. Government Accountability Office’s (GAO) issued its first-ever report calculating the cost of fraud to the U.S. government, estimating that it loses between $233 billion and $521 billion annually. (The report, based on a detailed review of government data from 12 agencies between 2018 to 2022, didn’t include fraud losses associated with revenues such as tax fraud, so total government losses could be significantly higher.)

With hundreds of billions at stake in government spending alone, and potentially trillions at stake to the U.S. as a whole, federal government efforts to prevent or detect fraud and financial crime aren’t only important — they’re critical. It’s through this lens that we offer our clear and strong stance in support of proven best practices for fighting fraud, waste and abuse.

We support measures designed to proactively prevent and detect fraud. The current U.S. administration has stated it intends to focus on eliminating improper payments and fraud by shoring up vulnerable payment systems, closing eligibility loopholes, improving identity verification and refining payment-tracking mechanisms. These are important goals. Every CFE knows that preventing fraud is more cost-effective than detecting fraud after it has occurred. To the extent that improper payments can be weeded out of federal spending programs without impacting legitimate expenditures, this would be a significant victory. The expertise that CFEs possess makes them uniquely qualified to support the government’s mission and make major improvements in this area.

We support enforcement of existing laws and regulations designed to deter and detect fraud and corruption, such as the Foreign Corrupt Practices Act (FCPA). We hope that the administration’s efforts to prevent fraud will be met by an equally serious focus on financial crimes detection and enforcement. No matter how strong an organization’s controls might be, there will always be gaps that criminals can exploit. The ACFE supports thousands of CFEs working throughout the government who dedicate themselves every day to tracking down stolen funds and bringing criminals to justice.

We support the Inspector General (IG) function, and its independent oversight of audits and investigations related to fraud, waste and abuse. Effective anti-fraud programs rest on the bedrock of independent and committed oversight. IGs play an important role in safeguarding public resources by supporting these efforts. For example, in a June 2023 report to Congress about fraud in pandemic assistance loan programs, the Small Business Administration’s (SBA) inspector general, Mike Ware, CFE, reported that as much as $200 billion in pandemic assistance loans might’ve gone to fraudsters. As of the report’s filing, the SBA OIG and other federal law enforcement agencies had already clawed back nearly $30 billion in lost funds. They had also secured 1,011 indictments, 803 arrests and 529 convictions related to pandemic fraud.

We support everyone who furthers the mission of the ACFE. We recognize and champion the amazing work CFEs and anti-fraud professionals do to protect the public from financial criminals. We are committed to supporting the genuine efforts of this or any other government when it comes to combating fraud and financial crime.   

John Warren, J.D., CFE, is Chief Executive Officer of the Association of Certified Fraud Examiners (ACFE).