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COVID relief money fraud reveals staggering numbers in the billions

Fraudsters who bilked the government out of COVID-19 relief funds, beware. Federal investigators looking into fraud claims have found billions in questioned funds already, and they’re hoping to expand their scope.

In report released to Congress last week, the Pandemic Response Accountability Committee reported it had identified $9.8 billion in monetary findings between Oct. 1, 2021, and March 31, 2022.

The report includes examples of fraud like more than $35 million obtained by a group of Houston-area men who falsified PPP loan applications as part of a fraud scheme, $60,000 made by a Mississippi man who of allegedly stole government property in the form of N-95 masks, iPads and iPhones and sold them at pawn stores and eBay while working for Veterans Affairs and more than $40,000 brought in by a Rhode Island office manager who applied for SBA loans and unemployment even though she had a job.

The Pandemic Response Accountability Committee, or PRAC, was mandated by the CARES Act signed into law by former President Donald Trump to provide oversight for $5 trillion in relief spending. In its previous report, released in October 2021, the committee found $33 billion in relief spending with meaningless descriptions. Overall, the committee made 184 recommendations to federal agencies about their findings during the six months covered in the report.

Chair Michael Horowitz recommended Congress pass the Administrative False Claims Act in the report. The legislation would raise the statutory ceiling on smaller, potentially more frequent claims from $150,000 to $1 million and expand the number of Department of Justice officials who can review claims.

“Too often those who fraudulently divert tax dollars in amounts below what is typically accepted by prosecutors are not fully held accountable, impacting agency programs and leaving the taxpayer footing the bill,” Horowitz said in March when he testified before the Senate Homeland Security Committee.

“I am hopeful that the Senate will take up and pass this legislation,” he said.

No action has been taken on the bill since last year, but Sen. Chuck Grassley, R-Iowa, who co-sponsored it, said when it was introduced that it would “significantly improve the process for smaller claims.” The bill was co-sponsored by three other Republicans and four Democrats.

The Labor Department estimated in March that at least $163 billion in pandemic unemployment benefits could potentially have been improperly paid and most was due to fraud.

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