10% Of $4.2 Trillion US COVID Relief Was Lost To Fraud, Waste: Report
Sat 8:13 am +01:00, 17 Jun 2023 9
By Ryan Morgan
As much as 10 percent of the $4.2 trillion the U.S. government has disbursed in COVID-19 relief aid may have been lost to fraud and waste.
A new analysis of COVID relief spending by The Associated Press estimates that fraudsters collected more than $283 billion, while another $120 billion was wasted or misspent. The news outlet expects estimates of pandemic waste and fraud to grow as investigators continue to review additional potential fraud schemes.
The U.S. government approved about $3.2 trillion in pandemic relief spending under President Donald Trump, and another $1.9 trillion under President Joe Biden. Of the about $5 trillion allocated for pandemic relief, about $1 trillion has yet to be paid out.
Estimates for pandemic relief fraud and waste already vary widely. The U.S. Department of Labor Inspector General has indicated $191 billion in pandemic-era unemployment insurance (UI) payments may have been improper, while others estimate the total UI fraud and waste could be as high as $400 billion. Researchers have estimated as much as $80 billion of Paycheck Protection Program (PPP) loans had indications of possible fraud.
Those involved with tracking down the fraud say there was simply too little oversight and too few restrictions on who could apply for relief funds, making it all too easy for fraud to take place.
While some individuals made off with millions in pandemic relief funds, the pilfering was often wide but not so deep.
“Here was this sort of endless pot of money that anyone could access,” said Dan Fruchter, head of the fraud and white-collar crime unit with the office of the U.S. Attorney for the Eastern District of Washington. “Folks kind of fooled themselves into thinking that it was a socially acceptable thing to do, even though it wasn’t legal.”
The overall massive scale of the pandemic relief that went out also obscured multi-billion-dollar mistakes. While the IRS had a 99 percent success rate in handling an $837 billion stimulus check program, its 1 percent error rate amounts to about $8 billion going to “ineligible individuals.”
In the seven decades before the pandemic, the Small Business Administration (SBA) had distributed $67 billion in disaster loans. During the pandemic, the SBA ended up handling more than a trillion dollars across the COVID-19 Economic Injury Disaster Loan and PPP loans. As the SBA took on a much larger financial responsibility, it was tasked with rapidly processing loans.
To speed up the process, the SBA allowed potential borrowers to “self-certify” that their application details were true. The Coronavirus Aid, Relief, and Economic Security (CARES) Act also barred the SBA from looking at tax return transcripts that could have identified potentially fraudulent or unqualified applicants.
“If you open up the bank window and say, give me your application and just promise me you really are who you say you are, you attract a lot of fraudsters and that’s what happened here,” said Michael Horowitz, U.S. Justice Department inspector general and chair of the federal Pandemic Response Accountability Committee (PRAC).
Clawing Back Relief Funds
Hundreds of people have been charged in connection with various pandemic fraud schemes.
In August 2022, Biden signed legislation to increase the statute of limitations to 10 years from five on crimes involving Economic Injury Disaster and PPP loans.
Congress hasn’t yet approved a measure that would give prosecutors additional time to go after UI fraud.
Earlier this year, Department of Labor Inspector General Larry Turner testified (pdf) that he expects his department to be busy investigating pandemic-related fraud through at least September 2026 “when the statute of limitations for most pandemic-related violations will have expired.” Without extending his deadline, Turner warned that people who stole the benefits may escape justice.
In addition to providing more time to prosecute pandemic fraud, Republican lawmakers requested a return of unspent COVID relief funds during a recent debate over the debt limit increase. In total, Republicans reached an agreement with Democrats to rescind $30 billion in unspent COVID relief funds as part of the final deal to increase the debt limit earlier this month.
Only 10%?
I bet that it was much, much more than that. I know for certain that it was at least 20% because that money can be traced directly into the super rich’s current accounts. See John Titus of Best Evidence
And then there is all the money that was washed into their corporations but hasn’t been drawn down yet. It was by far the biggest theft in history. Put 2007/8 into the shade
Not that it will do them any good, they are doomed, their system is failing
Took the words out of my mouth Pete. You can bet your boots if the government, WHO, and Pharma have anything to do with it you’ll be looking at least 80% pocketed. Ask all that that have jumped ship with their nests feathered and pockets full.
I thought 80% too Gordon, leave the scraps for the plebs
I don’t doubt that it’s much more Pete, and I do hope that your Private Frazer comment was correct too. My eldest son, Baz’ has 10 dogs, three kids and loads of hens. One cockerel had hardly any feathers on one side, and got called Alec, as in Bald wing, and there’s a little fat bossy bumbling cockerel called Manwairing. I love Dads Army.
Ha ha! I love Dads Armey too Ian
10 dogs, blimey! Are they foxhounds?
Well, kind of on the right track Pete. There Lurchers, well 6 are lurchers, and 4 cocker spaniels. One though is an Aus cattle dog x greyhound lurcher, called Bindy. She’s a rough and tumble get the job done type dog, she’s is a handful, and would fight with her shadow. I often walk her, but you need eyes on the back of your head.
Blimey they must be a handful Ian! Good on him
My young staffy, and old labrador, are enough for me. Staffy is called “Blue”, she’s an Evertonian ;-)) She is the best dog that I’ve ever owned by far, so beautifully sensitive, she’s uncanny, she senses the mood, the vibes if you like. Strong, brave and fearless too. Doesn’t suffer dog fools, that’s for sure. I have to have eyes in my back too
Blue sounds like a cracker Pete. I once had a lab called Bracken, or more often Brack. She was absolutely perfect for me sense my mood as you say. When I’d come in from work and take my boots off, I’d send her upstairs for my trainers. She’d gallop up and get them for me. One day my sister was there and we were talking about how good she was, I said here watch this. I sent her up for my trainers, and as she ran upstairs, I shouted the Adidas ones. She brought them of course, and my sister was open mouthed. I never told her that I only had one pair of trainers at the time.
Brilliant Ian! That gave me a good laugh
I’ve always had a dog, they become part of you somehow, our spirits somehow join, and the bond is lifelong. It’s so comforting to know they are there too