A federal committee tasked with tracking pandemic assistance fraud found that the Small Business Administration and the Department of Labor together disbursed nearly $80 billion to potential fraudsters.
In total, the federal government spent over $4.6 trillion on all COVID-19 relief programs. The SBA received an extra $957 billion to fund its Economic Injury Disaster Loan program and its Paycheck Protection Program, while the DOL received $695 billion for its COVID-19 Unemployment Insurance programs.
Previous audits have estimated that the total amount of improper or fraudulent payments in these programs reached $400 billion. The new Pandemic Response Accountability Committee (PRAC) report shows that $79 billion of this fraud stemmed from the use of an estimated 1.4 million stolen or invalid Social Security numbers.
PRAC Chair Michael Horowitz said federal agencies might have deterred the fraud if they had conducted more rigorous identity checks and not removed normal program guardrails in their haste to disperse the aid.
“Our oversight work during the past five years has detailed federal agencies’ inability to use data to effectively prevent pandemic-related fraud,” Horowitz said in a Wednesday statement. “By contrast, the PRAC’s sophisticated data analytics capabilities…can strengthen program integrity and prevent billions of dollars in fraud, ensuring taxpayer funds are paid to legitimate applicants.”
To conduct the analysis, investigators randomly sampled 662,000 identity records from the 67.5 million applicants across the three programs. In almost 24,000 cases, the Social Security number, date of birth, and name of the applicant(s) did not match the Social Security Administration’s records. In some instances, the social security number submitted by the applicant did not exist.
The SSA also found that 11,514 of the applications came from individuals who are currently deceased. However, PRAC did not include those individuals in its fraud estimate data because it does not know whether those applicants were alive during the pandemic.
The full scope of pandemic aid fraud is still unknown. Some Republican lawmakers have pushed forward legislation that would extend the statute of limitations for criminally prosecuting COVID-19 aid fraudsters, as The Center Square reported.
