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Texas Governor Abbott targets fraud in federal housing and online payments

After a $5B fraud scandal, Texas steps up with a bold plan to safeguard taxpayer funds. Could this partnership with HUD reshape federal oversight?

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The image shows a poster on the wall with text that reads "Resettlement Administration: Fields are...
The image shows a poster on the wall with text that reads "Resettlement Administration: Fields are Robbed of Fertility by Misuse". The poster is surrounded by a house, trees, and water, emphasizing the importance of the message.

Texas Governor Abbott targets fraud in federal housing and online payments

Texas Governor Greg Abbott has stepped up efforts to combat fraud in federal housing programmes. In a recent letter to the Trump administration, he offered state support to detect and prevent improper payments. The move follows concerns over billions in potential fraud across US rental assistance schemes.

This marks Abbott’s second anti-fraud initiative in a week, after ordering investigations into Texas childcare services following a major Medicaid fraud case in Minnesota.

The push comes after the US Department of Housing and Urban Development (HUD) uncovered over $5 billion in potentially fraudulent or erroneous online payments nationwide. Abbott proposed a partnership with Housing Secretary Ben Carson to develop stricter fraud prevention measures. He also volunteered the Texas Department of Housing and Community Affairs (TDHCA) to join a HUD pilot programme aimed at eliminating improper online payments.

TDHCA already uses a HUD system to crosscheck data and block payments to deceased individuals. The agency also employs a Chief of Fraud Prevention and Investigation, tasked with reviewing programmes for signs of fraud, waste, and abuse. Unlike Minnesota, Texas does not operate Medicaid-funded housing schemes—the focus of recent fraud prosecutions there. In Minnesota, federal prosecutors have charged at least 98 people in a Medicaid fraud scheme spanning 14 programmes. So far, 60 have been convicted. Abbott’s latest actions follow his order for two Texas agencies to probe the state’s Child Care Services Program after the Minnesota case came to light.

The governor’s proposals would expand Texas’s role in detecting online payment fraud at a federal level. If adopted, the measures could help recover or prevent billions in taxpayer losses. TDHCA’s existing systems and expertise may now be applied more widely under the proposed HUD partnership.

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