by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Fraudsters have stolen nearly $100 billion in pandemic relief funds, resulting in the arrests of more than 100 suspects, including individuals acting alone and members working for organized groups, the U.S. Secret Service said Tuesday.
The Secret Service recently appointed a new national pandemic fraud recovery coordinator to oversee the wave of fraud causes related to scammers diverting funds from the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program and another program that issues unemployment assistant funds nationwide, according to CNBC. The agency has more than 900 active investigations related to pandemic fraud, the report says.
“I’ve been in law enforcement for over 29 years and worked some complex fraud investigations for 20 plus years, and I’ve never seen something at this scale,” said Assistant Special Agent in Charge Roy Dotson, who will serve as the national pandemic fraud recovery coordinator.
Just over $2.3 billion in stolen funds have been recovered so far.
“There’s no doubt that the programs were easily accessible online. And so, with that, comes the opportunity for bad actors to get into that mix,” Dotson told CNBC. “It was necessary to try to get these funds out to people that were truly hurting, and no fault of anybody.”
The Labor Department inspector general in March released a report faulting inadequate controls on the Paycheck Protection Program and the Economic Injury Disaster Loan program for helping facilitate billions of dollars in potential fraud. The report found that at least $89 billion of the estimated $896 billion in unemployment program funds “could be paid improperly, with a significant portion attributable to fraud.”
The “primary difficulty” in investigating the cases has been the “sheer scope” of the amount of fraudulent loans and unemployment insurance benefits distributed, Dotson explained.