The Department of Labor has sent a federal investigative "strike team" to New York to review unemployment insurance fraud that the department says is costing taxpayers an estimated $2 million a day.

The New York Post reported that the strike team includes investigators from the Department of Labor's Office of Inspector General, who will work to identify fraudulent claims, recover taxpayer funds, and pursue criminal prosecutions.

Inspector General Anthony D'Esposito said the effort is intended to recover stolen funds and hold those responsible to account.

"In partnership with Acting Secretary Keith Sonderling, we are taking a tough-on-crime approach to dismantle this fraud, hunt down every stolen dollar, and prosecute those responsible," D'Esposito said, according to the Post.

Labor Department leaders said New York recorded more than $750 million in improper unemployment insurance payments and $507 million in fraudulent payments last year. The state has recovered about 25% of the fraudulently obtained funds.

The deployment follows a Labor Department initiative announced in June directing governors in all U.S. states and territories to strengthen oversight of unemployment insurance programs and address fraud, waste, and abuse.

Sonderling warned states that the department is prepared to use every available enforcement tool, including withholding administrative funding for the first time, to protect taxpayer dollars and improve program integrity.

"We are officially putting governors on notice," Sonderling said. "The American people will no longer tolerate the blatant waste, fraud, and abuse of their hard-earned tax dollars. No state should allow it either. If states allow it, they will suffer the consequences."

The June initiative identified New York, California, and Illinois as states with significant unemployment insurance problems. The department said New York is losing an estimated $2 million per day through fraud and improper payments while posting one of the nation's highest improper payment rates.

California was cited for more than $20 billion in federal unemployment insurance debt tied to fraud, improper payments, and mismanagement. Illinois was reported to have improperly paid more than $320 million in unemployment benefits.

New York Gov. Kathy Hochul's administration has said the state takes unemployment insurance fraud seriously, has strengthened safeguards since the pandemic, and continues working with law enforcement to investigate fraudulent claims while ensuring eligible workers receive benefits.