Billions of dollars have been stolen from federal coronavirus pandemic relief money since 2020, federal officials recently told Congress, as they sought funding and legislation to fight waste, fraud and abuse, The Washington Post reported.
Testifying before the House of Representatives’ Oversight and Accountability Committee, the officials detailed how criminals absconded with more than $5 billion in aid allotted by Congress in response to the pandemic.
The more than $5 billion in loans and grants to small businesses were stolen through the use of questionable Social Security numbers, Michael Horowitz, the chair of the Pandemic Response Accountability Committee (PRAC), wrote in his testimony. The Government Accountability Office found that “the extent of fraud in COVID-relief programs is not yet known but our estimate suggests that one program, Unemployment Insurance, made over $60 billion in fraudulent payments.”
The GAO’s inspector general has 536 ongoing investigations involving the Paycheck Protection Program (PPP), the COVID-19 EIDL (Economic Injury Disaster Loan) program, or both, the GAO report stated.
The Small Business Administration struggled to manage applications for its roughly $5 trillion in total loans and grants, The Post reported in an investigation. Its review process overlooked applications filed in the name of nonexistent or ineligible businesses, tied to foreign crime syndicates and submitted using fake Social Security numbers. The SBA also outsourced some of its oversight to companies that collected billions in taxpayer-funded fees while conducting inadequate oversight, The Post reported.
“We testified on contributing factors and our prior related recommendations to agencies and Congress," the GAO report stated. "For example, we suggested that Congress reinstate requirements that agencies report annually on their efforts to prevent, detect, and respond to fraud.”
The officials called on the legislators to enhance their ability to collect and track data about pandemic aid spending, to bring civil and criminal charges, and to recoup stolen taxpayer money. David Smith, an assistant director in the Secret Service's Office of Investigations, told Congress that the massive amount of theft will likely burden the federal government with time-consuming and costly legal work for “years to come.”
Gene Dodaro, the U.S. comptroller general and head of the GAO, told the lawmakers that, the next time it approves large amounts of emergency funds, it should be “done in a way that gets the funds to the people who need it and not allow this type of fraudulent activity to plague our national programs.”