policy

Fraud Is Doing a Lot of Work in That Sentence

A Political Guide to Fraud — Part 1

By JLCAugust 20, 2026

Fraud, waste, abuse, improper payments, allegations, convictions and restitution are not interchangeable. Here's how to tell what those enormous numbers actually mean.

Start with the word "fraud"

Fraud is not simply a payment the government wishes it had not made. The Government Accountability Office defines fraud as obtaining something of value through willful misrepresentation. GAO describes that misrepresentation as involving materially false statements made with actual knowledge, deliberate ignorance or reckless disregard for falsity.

That requirement matters because political claims often use "fraud" as a catch-all for errors, waste, suspicious payments and criminal conduct. Those categories can overlap, but they do not mean the same thing.

A Political Guide to Fraud: What the Numbers and Labels Mean

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Fraud

What It MeansObtaining something of value through willful misrepresentation; intent or knowing/reckless falsity matters.

What It Does Not Automatically ProveA fraud-risk estimate or suspicious payment does not by itself prove a particular person committed fraud.

Question to AskWas fraud adjudicated, admitted in a plea, proven at trial, or only alleged?

Improper payment

What It MeansA payment that should not have been made or was made in the wrong amount; certain payments with insufficient documentation are also counted.

What It Does Not Automatically ProveIt does not automatically mean fraud. Errors and documentation failures can create improper payments.

Question to AskHow much was attributed to fraud versus error, documentation, eligibility or another cause?

Waste

What It MeansCareless, extravagant or purposeless use of government resources; program-specific definitions can vary.

What It Does Not Automatically ProveWaste does not automatically establish intentional deception or a crime.

Question to AskWas this inefficient spending, or is there evidence of intentional deception?

Abuse

What It MeansImproper or unreasonable conduct or misuse of authority/resources; program definitions may be more specific.

What It Does Not Automatically ProveAbuse is not automatically criminal fraud.

Question to AskWhich rule or standard defines the conduct as abuse?

Amount alleged

What It MeansA dollar figure asserted by prosecutors or another government authority in an allegation or charging document.

What It Does Not Automatically ProveIt is not necessarily an adjudicated or actual loss.

Question to AskDid a court later determine an actual loss amount?

Charged / indicted

What It MeansProsecutors have formally accused a defendant of violating criminal law.

What It Does Not Automatically ProveAn indictment is not evidence of guilt and is not a conviction.

Question to AskWhat is the current case status—pending, plea, trial verdict, dismissal or sentencing?

Convicted

What It MeansGuilt has been established by a guilty plea or verdict.

What It Does Not Automatically ProveA conviction does not mean every dollar alleged at charging was necessarily proven as actual loss.

Question to AskWhat offense and loss amount were established in the plea, verdict or sentencing record?

Restitution ordered

What It MeansA court orders a convicted defendant to reimburse victims for qualifying losses caused by the offense.

What It Does Not Automatically ProveIt does not mean the full amount has actually been collected or returned.

Question to AskHow much was ordered, and how much has actually been recovered?

Civil settlement

What It MeansCivil allegations or claims are resolved by agreement, often involving payment and other terms.

What It Does Not Automatically ProveA settlement is not automatically a criminal conviction or admission of liability.

Question to AskDoes the agreement contain an admission, denial, or no-admission clause?

Fraud estimate

What It MeansA statistical estimate of probable fraud loss across a program or government activity.

What It Does Not Automatically ProveIt does not mean every estimated dollar has been individually detected, charged or adjudicated.

Question to AskWhat methodology, confidence range and programs were included?

Term	What It Means	What It Does Not Automatically Prove	Question to Ask
Fraud	Obtaining something of value through willful misrepresentation; intent or knowing/reckless falsity matters.	A fraud-risk estimate or suspicious payment does not by itself prove a particular person committed fraud.	Was fraud adjudicated, admitted in a plea, proven at trial, or only alleged?
Improper payment	A payment that should not have been made or was made in the wrong amount; certain payments with insufficient documentation are also counted.	It does not automatically mean fraud. Errors and documentation failures can create improper payments.	How much was attributed to fraud versus error, documentation, eligibility or another cause?
Waste	Careless, extravagant or purposeless use of government resources; program-specific definitions can vary.	Waste does not automatically establish intentional deception or a crime.	Was this inefficient spending, or is there evidence of intentional deception?
Abuse	Improper or unreasonable conduct or misuse of authority/resources; program definitions may be more specific.	Abuse is not automatically criminal fraud.	Which rule or standard defines the conduct as abuse?
Amount alleged	A dollar figure asserted by prosecutors or another government authority in an allegation or charging document.	It is not necessarily an adjudicated or actual loss.	Did a court later determine an actual loss amount?
Charged / indicted	Prosecutors have formally accused a defendant of violating criminal law.	An indictment is not evidence of guilt and is not a conviction.	What is the current case status—pending, plea, trial verdict, dismissal or sentencing?
Convicted	Guilt has been established by a guilty plea or verdict.	A conviction does not mean every dollar alleged at charging was necessarily proven as actual loss.	What offense and loss amount were established in the plea, verdict or sentencing record?
Restitution ordered	A court orders a convicted defendant to reimburse victims for qualifying losses caused by the offense.	It does not mean the full amount has actually been collected or returned.	How much was ordered, and how much has actually been recovered?
Civil settlement	Civil allegations or claims are resolved by agreement, often involving payment and other terms.	A settlement is not automatically a criminal conviction or admission of liability.	Does the agreement contain an admission, denial, or no-admission clause?
Fraud estimate	A statistical estimate of probable fraud loss across a program or government activity.	It does not mean every estimated dollar has been individually detected, charged or adjudicated.	What methodology, confidence range and programs were included?

Definitions are simplified for public understanding and should be read with the cited source material. Exact legal definitions can vary by statute and program.

Sources:[179][180]

An improper payment is not automatically fraud

Federal law generally treats an improper payment as a payment that should not have been made or was made in the wrong amount. It can include overpayments, underpayments, duplicate payments, payments to ineligible recipients and payments for which the government lacks enough documentation to determine whether the payment was proper.

GAO is explicit: all fraudulent payments are improper, but not all improper payments are fraudulent. Some are caused by errors, insufficient documentation or other nonfraud causes.

Fraud Math Rule #1: a large improper-payment estimate does not become a large fraud estimate merely because the word "fraud" is more exciting.

Sources:[179][181]

Waste and abuse are different again

GAO describes waste as spending government resources carelessly, extravagantly or without purpose. Abuse involves improper or unreasonable behavior or misuse of a position or authority. In health programs, CMS similarly distinguishes waste and abuse from fraud and emphasizes that fraud involves intent.

The exact legal definition can depend on the program and statute involved, but the practical lesson is simple: inefficiency, bad management, unnecessary spending and intentional deception should not automatically be placed in the same bucket.

Sources:[180][182]

Charged is not convicted

An indictment tells us what prosecutors allege and what criminal charges a defendant must answer. It is not proof that the allegations are true. The Justice Department routinely states that an indictment is merely an allegation and that a defendant is presumed innocent unless and until proven guilty.

That means a political claim such as "100 people committed fraud" needs another question: were 100 people charged, did 100 plead guilty, were 100 convicted at trial, or is the speaker combining those categories?

See DOJ's Indictment Disclaimer

Sources:[183]

The dollar amount may not mean what you think it means

Fraud cases can produce several different dollar figures. A charging document may describe the amount defendants allegedly attempted to obtain or the value of claims submitted. A later court proceeding may establish a different actual loss. A judge may order restitution for financial losses caused by the offense. And the amount ultimately collected can be lower than the restitution ordered.

DOJ explains that restitution is a court-ordered reimbursement to victims for qualifying financial losses. It also warns that even when restitution is ordered, there is no guarantee the victim will receive the entire amount.

Sources:[184]

A civil settlement is not automatically a criminal conviction

Government fraud enforcement also includes civil cases, particularly under laws such as the False Claims Act. A civil settlement may resolve allegations without a criminal conviction and sometimes without an admission of liability.

For example, DOJ settlement agreements can expressly state that the settlement is neither an admission of liability by the settling party nor a concession by the government that its claims lacked merit. So a settlement amount should not automatically be described as money proven stolen in a criminal case.

Open Example DOJ Settlement Agreement

Sources:[185]

How Leiflets will read fraud claims

For this series, every large fraud claim gets the same questions: What exactly is being counted? Is the number alleged, estimated or adjudicated? Was the money requested, paid, prevented, recovered or ordered as restitution? Are the people involved charged, convicted or still awaiting trial?

If three billion-dollar numbers are going to be added together, it would also be helpful if they measured the same thing.

The point is not to make fraud sound smaller or larger. It is to describe what the available evidence actually establishes.

Sources:[179][183][184]

Conclusion

Fraud can be enormous, costly and criminal without every suspicious or improper payment being fraud. The same discipline applies to people and dollar figures: allegations are not convictions, restitution ordered is not necessarily restitution collected, and civil settlements are not automatically admissions of criminal wrongdoing. The rest of this series will use those distinctions when examining health care fraud, Minnesota fraud cases and voter fraud.