This bill, titled the "Welfare Fraud Deterrence and Recovery Act of 2026," significantly enhances criminal penalties for welfare fraud. It amends federal law to impose a maximum of 15 years imprisonment for fraud related to Federal welfare programs, with a minimum of 2 years for noncitizens or naturalized citizens, and a minimum of 5 years if the fraud involves $100,000 or more.

The legislation also introduces substantial immigration consequences for fraud convictions. It establishes a 20-year reentry bar for former naturalized citizens denaturalized due to welfare fraud, makes any alien convicted of a fraud offense deportable, and expands expedited removal to include such individuals. Furthermore, it mandates denaturalization for naturalized citizens convicted of defrauding Federal, State, or local public benefit programs if the fraudulent acts occurred after their naturalization.

To combat welfare fraud, the bill establishes a Welfare Fraud Recovery Task Force within the Department of Justice, in consultation with the Secretary of Health and Human Services. This Task Force is charged with investigating, prosecuting, and recovering funds lost to fraud in Federal welfare programs. It is authorized to bring civil actions against individuals who knowingly submit false claims, use false records, conspire, or conceal obligations related to these programs.

Civil penalties for such violations include a fine of $10,000 to $20,000, three times the amount of damages sustained by the U.S. Government, and legal costs. For noncitizens, an additional civil penalty of two times the damages is imposed. A Welfare Fraud Recovery Fund is created in the Treasury to receive recovered amounts, which will then be used to reimburse affected Federal welfare programs and cover Task Force investigation and prevention costs. The bill also includes whistleblower protections and rewards for individuals providing information leading to successful recoveries.

Finally, the Task Force is mandated to facilitate interstate and cross-border cooperation to address fraud schemes. This includes sharing information, conducting joint investigations with states (with states receiving a share of recoveries), and utilizing international agreements and diplomatic channels for investigations and asset recovery in cases involving foreign elements. States that fail to cooperate with Task Force requests may face withholding of up to 10 percent of their Federal welfare program funds.