Fraud in Federal Programs: Limited Beneficial Ownership Information Available on Awardees

What GAO Found Illicit actors hide their beneficial ownership in multiple ways to fraudulently access federal awards, such as contracts, grants, and Medicare payments, and to evade payment on taxes. GAO’s review of federal cases highlights tactics illicit actors have used, such as using stolen identities, shell companies, professional enablers, and pass-through billing schemes to hide ownership. For example, from July 2019 through January 2023, three purported hospice owners stole identities to register shell companies and defrauded Medicare for nearly $16 million. In another example, from June 2018 through September 2018, a foreign-based scam ring, with U.S. based conspirators, directed legitimate federal contractors to a fake government website. This pass-through billing scam caused the government to misdirect $23.5 million to the fraudsters. Pass-Through Billing Scam The federal award process requires recipients to disclose some information on company owners and relationships, but it generally does not require disclosure of beneficial owner information. For example, names of corporate officers and directors may be collected, but these individuals may not be the beneficial own...