The investigation uncovers a pattern of fraudulent activities, embezzlement, and mismanagement of funds that have plagued COVID-19 relief efforts worldwide.
FILE : A woman picks up free COVID-19 test self-collection kits from the OC Health Care Agency after arriving on a flight at John Wayne Airport in Santa Ana, CA on Tuesday, Dec. 21, 2021. Fraudsters used the Social Security numbers of dead people and federal prisoners to get unemployment checks. Cheaters collected those benefits in multiple states. And federal loan applicants weren’t cross-checked against a Treasury Department database that would have raised red flags about sketchy borrowers.
The U.S. government has charged more than 2,230 defendants with pandemic-related fraud crimes and is conducting thousands of investigations. "I’m hesitant to get too far out on how much it is," he said. "But clearly it’s substantial and the final accounting is still at least a couple of years away." The health crisis thrust the Small Business Administration, an agency that typically gets little attention, into an unprecedented role. In the seven decades before the pandemic struck, for example, the SBA had doled out $67 billion in disaster loans.
The SBA inspector general’s office has estimated fraud in the COVID-19 economic injury disaster loan program at $86 billion and the Paycheck Protection program at $20 billion. The watchdog is expected in coming weeks to release revised loss figures that are likely to be much higher. "Death by a thousand cuts might be death by 80,000 cuts for them," Horowitz said of Ware’s workload. "It’s just the magnitude of it, the enormity of it."
In less than a few days, a week at most, Horowitz said, SBA might have discovered thousands of ineligible applicants. "We came into office when the largest amounts of fraud were already out of the barn," Sperling added. "Yes, the states were overwhelmed in terms of demand," said Brent Parton, acting assistant secretary of the U.S. Labor Department’s Employment and Training Administration. "We had not seen a spike like this ever in a global event like a pandemic. The systems were underfunded. They were not resilient. And I would say, more importantly, were vulnerable to sophisticated attacks by fraudsters.
Ohio’s Department of Job and Family Services reported in February $1 billion in fraudulent pandemic unemployment claims and another $4.8 billion in overpayments.
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