Full Extent of COVID Fraud Will ‘Never Be Known With Certainty’
A couple claiming to run a farm that employed dozens of people used fake employee records to get more than $1 million in COVID-19 relief payments when they actually employed no one on a farm that did not exist.
A social media influencer created fake documents to score more than $400,000 in COVID-19 funds meant to help small businesses, then used the money to buy cryptocurrency and gifts for his girlfriend.
A state employee whose job was to stop unemployment benefits fraud helped other fraudsters navigate around fraud prevention systems so they could steal more than $1 million, including federal tax dollars made available to states during the pandemic.
Only now, nearly four years after the federal government approved an unprecedented amount of emergency spending in response to the COVID-19 pandemic, are investigators getting a full picture of all the ways that schemers and thieves raided programs. Congress approved about $4.6 trillion in COVID-19 emergency spending, and so much of it was stolen that auditors now say we’ll likely never have a full accounting of it all.
“When the federal government provides emergency assistance, the risk of payment errors—including those attributable to fraud—may increase because the need to provide this assistance quickly can lead agencies to relax or forego effective safeguards,” the Government Accountability Office (GAO) explained in a new report summing up efforts to recoup stolen funds. “Because not all fraud will be identified, investigated, and adjudicated through judicial or other systems, the full extent of fraud associated with the COVID-19 relief funds will never be known with certainty.”
As Reason has previously reported, auditors believe that about $200 billion was fraudulently disbursed from two programs run by the Small Business Administration (SBA) during the pandemic. That’s about one-sixth of all spending run through the SBA’s Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. Additionally, the GAO believes that between $100 billion and $135 billion in federal unemployment funds—provided to states on a temporary basis during the pandemic—were lost to fraud.
One former U.S. attorney has called it “the biggest fraud in a generation.”
It’s far too late to put all those horses back in the barn, but state and federal officials are trying to do wh
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