WSJ What’s News - Fraudsters Stole Billions in Jobless Benefits. They Might Get Away With It

Episode Date: January 16, 2025

P.M. Edition for Jan. 16. Fraudsters stole billions via government jobless claims during the pandemic. WSJ U.S. economy reporter Paul Kiernan tells us why time is running out to prosecute them. And, TikTok’s CEO plans to attend Donald Trump’s inauguration, news that comes days before a ban of the popular video app is set to go into effect. And WSJ health reporter Brianna Abbott talks about a new report that says young women in the U.S. are more at risk for cancer than men. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

The ceasefire deal between Israel and Hamas starts to look a bit fragile. And how fraudsters stole billions of taxpayer dollars and why they might get away with it. One of the sources I spoke with for the story noted that just the sheer amount of money that went out the door and into the pockets of organized crime really kind of funded a generation of criminals. It's going to be really bad for rule of law and accountability if we just close the door on these investigations. Plus, why young women in the U.S. are more at risk for cancer than men. It's Thursday,

January 16th. I'm Alex Osala for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We start this evening in the Middle East. We've been covering the ceasefire deal that would pause the fighting in Gaza, set to start on Sunday. But that fragile agreement already seems

to be encountering issues. The Israeli cabinet has delayed its vote on the deal. Israeli Prime Minister Benjamin Netanyahu accused Hamas of reneging on parts of the agreement reached during negotiations in Qatar. The prime minister's office said that the cabinet, which was expected to convene today, wouldn't meet until Israeli negotiators said Hamas had accepted all aspects of the deal. Israeli officials said later that the meeting was moved to tomorrow. Netanyahu's office also said that negotiations were continuing and a deal would be announced only once they were completed.

Arab mediators said they were working to resolve the remaining issues, including a disagreement over which Palestinian prisoners Israel would release. A senior Hamas official said today that the group remained committed to the deal. Time is running out to take action on what some lawmakers are calling the greatest heist of taxpayer dollars ever via fraudulently obtained COVID-era unemployment benefits. Last year, federal prosecutors filed charges in an alleged transnational scheme to launder tens of millions of dollars. The scheme is among the largest uncovered since Washington rushed almost $900 billion

in jobless benefits out the door following the COVID-19 outbreak in 2020. Paul Kiernan covers the U.S. economy for the Wall Street Journal and joins me now. Paul, how big a problem is this and how much does it cost? So in March 2020, Congress and the Trump administration were scrambling to just contain the economic fallout from the pandemic. And as part of the trillions of dollars that they pumped into the economy was a big expansion in unemployment benefits. As part of this rush, benefits were just being paid out really fast. State unemployment offices which administer jobless benefits were overwhelmed. And so predictably, a lot of the money went to fraudsters. The Government Accountability Office has estimated up to $135 billion of jobless benefits, i.e.,

our tax dollars were paid to fraudsters. It's been almost five years since the pandemic broke out and these benefits started getting paid. The challenge that prosecutors are coming up against is that the statute of limitations for a lot of the conduct that enabled unemployment fraud is five years. So starting in March or April, it's gonna become harder and harder

to bring some of these cases. And we're getting really close to the point where the criminals will basically just get off scot-free. And it's not just a few of the criminals, it's actually the vast majority. Has any money been recovered so far? So far, according to the latest data, prosecutors have recovered or kind of gotten court orders to recover about $1.1 billion. Again, this is out of up to $135 billion that were stolen. So that's like less than 1%. The Department of Labor Inspector General and the pandemic kind of

oversight groups have been urging Congress to extend the statute of limitations from five to 10 years, give them more time to go after more of these criminals. But some bills have been introduced, but they haven't been passed or signed into law. And the congressional aides that I spoke to said, look, a lot of people would like to get this done, but they don't really see a vehicle yet for this to be signed into law. But the clock is certainly ticking. That was Wall Street Journal reporter Paul Kiernan. Thanks, Paul.

Thanks, Alex. In business news, American Express has agreed to pay approximately $230 million in penalties to the Department of Justice and regulators at the Federal Reserve over deceptive practices tied to how it sold credit cards and wire services to small business customers. The Journal was the first to report on these practices that involved misrepresenting card rewards and fees and checking credit reports without consent.

Amex said it had cooperated with the agencies and regulators to address the problems, including disciplining staff and changing its organization and training. And big banks continue to report earnings today. Morgan Stanley says its profit more than doubled in the fourth quarter, fueled by its investment banking and trading businesses. Its profit rose to about $3.71 billion, beating analysts' expectations. Bank of America's profit also more than doubled in the fourth quarter, reaching $6.67 billion. The profit gain was magnified because a year ago, the bank took on a $2.1 billion charge

for a special FDIC assessment all lenders had to pay. Despite those solid earnings from banks, major U.S. indexes ended the day down, dragged by losses in tech shares. The S&P 500 and the Dow both fell about 0.2 percent, while the Nasdaq shed 0.9 percent. Mortgage rates rose above 7 percent, a key psychological threshold for buyers and sellers, for the first time since mid-2024. According to a survey of lenders by mortgage finance firm Freddie Mac, the average rate on the standard 30-year fixed mortgage rose to 7.04% this week. It's an early setback for a housing market that's coming off two straight years of poor sales. Coming up, why cancer rates in the U.S. are rising among young women. That's after the

break. For decades, men have faced a greater risk of getting diagnosed with cancer. But according to a new report from the American Cancer Society released today, women are catching up. According to the report, cancer rates for women in the U.S. have risen over the past half century, particularly among women under age 65 diagnosed with breast cancer. Men, meanwhile, have experienced a decline in cancer rates compared with prior decades. My colleague, Pierre Bienamay,

spoke with Wall Street Journal health reporter Brianna Abbott and asked her what's behind this rise in overall cancer rates in women. The main driver for this increase in women is breast cancer sort of among younger women. And we don't know what's happening for sure, but women is breast cancer among younger women. And we don't know what's happening for sure, but there are a couple of different factors researchers are considering. Number one, women having children later or not at all, because we know that having children earlier ages and breastfeeding lowers your risk for some kinds of breast cancer. Then we also see increasing obesity rates and sort of heavier alcohol consumption among

younger women that might be contributing. And we don't know if screening is also contributing, like it's just catching more cancers. But all of these factors are at play here. The good news is that the overall US cancer death rate has dropped 34% since 1991, translating to some 4.5 million fewer cancer deaths than there would have been if the rate had stayed the same. There was also a marked decline in lung cancer rates, right? Lung cancer is far and away the biggest cancer killer, but the trends are actually really

positive because we've seen these declines in smoking rates over the last several decades. So you see a marked drop in cases and deaths, especially among older men, and that's really great news. Women's declines in lung cancer are still there, but they're actually a bit slower. And that's because women took up smoking later and they started declining smoking rates later as well. So their progress there has been slower.

And not only did women's cancers increase overall, but you're seeing these really positive trends for men in lung cancer and also some sort of dropping in prostate cancer cases as well. And is this report maybe likely to lead to any new recommendations? I'm not sure if the report will change recommendations in part because a lot of the things that we would recommend are things that are already recommended. It's getting your mammograms on time, eating right, diet, quitting smoking, lower alcohol use, all of those things that sort of we're familiar with. And something

else that women should probably keep in mind too, especially if you're on the younger side and you might feel a lump or something comes up, cancer is not out of the question. So that's something that women and men should really keep in mind going forward. Brianna Abbott covers health for The Wall Street Journal. She was speaking to my colleague Pierre Bienamay. Meanwhile, U.S. health officials said that Zin, America's most popular nicotine pouch, could stay on the market. The Food and Drug Administration said that Zin, a product of

Philip Morris, poses a lower risk of cancer and other serious health conditions than cigarettes or traditional dipping tobacco, and that its benefit as a safer alternative for adult cigarette smokers outweighed its potential risk to young people. With the TikTok ban set to go into effect in just a few days, the app has new hope for survival in the U.S. According to people familiar with the matter, CEO Xiu Qu is planning to attend Donald Trump's inauguration, and he's expected to sit among the president-elect's high-profile guests during Trump's inaugural address on Monday. Meanwhile, people involved in the discussions say that Trump's advisors

are working to find ways to push back the deadline to ban the app. A spokeswoman for Trump's transition team said the president-elect has repeatedly expressed his desire to save TikTok. And Scott Bessend, Trump's nominee for Treasury Secretary, defended tariffs and argued for tax cut extensions during his confirmation hearing today. No Democratic members of the Senate Finance Committee committed to supporting him while Republicans praised him.

And finally, so-called ghost jobs, committed to supporting him while Republicans praised him. And finally, so-called ghost jobs, the roles that companies advertise but have no intention of filling, are on the rise. And for workers, they've become a real problem. According to an analysis of internal data by hiring platform Greenhouse, these fake job postings may account for as much as one in five jobs advertised online. Wall Street Journal Careers and Work Bureau Chief Lynn Cook told our Your Money Briefing podcast why some companies are doing this.

Somebody leaves a company, you want to backfill their position, you talk to HR, you advertise it and then suddenly someone higher than you says, wait a minute, are we sure we want to backfill that position? We'll just leave some of these jobs unfilled and save some money. So that's actually a very reasonable, logical reason something might be posted and not filled. There are some not so reasonable, some people would say more nefarious things that companies do too. They might decide, well, we don't really know if we want to fill this job, but let's just throw a posting out there and fish for somebody. Maybe there's a perfect candidate that we can't live without.

But there might be 800 people applying and they're taking a look and saying, ah, we're not really committed to filling this role. And you can hear more about this and how to recognize the fake job postings in tomorrow's Your Money Briefing podcast. And that's What's news for this Thursday afternoon. Today's show was produced by Anthony Bansi and Pierre Bienneme with supervising producer Michael Kosmitis. I'm Alex Osila for The Wall Street Journal.

We'll be back with a new show tomorrow morning. Thanks for listening. ["The Wall Street Journal"]