Nearly $100 billion at minimum has been stolen from COVID-19 relief programs set up to help businesses and people who lost their jobs due to the pandemic, the U.S. Secret Service said Tuesday.
The estimate is based on Secret Service cases and data from the Labor Department and the Small Business Administration, said Roy Dotson, the agency’s national pandemic fraud recovery coordinator, in an interview. The Secret Service didn’t include COVID-19 fraud cases prosecuted by the Justice Department.
The Secret Service said it has seized more than $1.2 billion while investigating unemployment insurance and loan fraud, and has returned more than $2.3 billion of fraudulently obtained funds by working with financial partners and states to reverse transactions. The Secret Service says it has more than 900 active criminal investigations into pandemic fraud, with cases in every state, and 100 people have been arrested so far.
Hear from Special Agent Roy Dotson, the federal coordinator for COVID-19 relief fraud for the Secret Service in an effort to get ahead of fraudsters taking pandemic relief funds. https://t.co/exTYgMZqAY
— U.S. Secret Service (@SecretService) December 21, 2021
While roughly 3% of the $3.4 trillion dispersed, the amount stolen from pandemic benefits programs shows “the sheer size of the pot is enticing to the criminals,” Dotson said. Most of that figure comes from unemployment fraud. The Labor Department reported about $87 billion in unemployment benefits could have been paid improperly, with a significant portion attributable to fraud.
An Oregon dentist, Salwan Adjaj, faces charges for allegedly defrauding COVID-19 relief funds of almost $8 million. More: https://t.co/XBxaeXFraG
— FBI Portland (@FBIPortland) December 16, 2021
The Justice Department said last week that its fraud section had prosecuted over 150 defendants in more than 95 criminal cases and had seized over $75 million in cash proceeds derived from fraudulently obtained Paycheck Protection Program (PPP) funds, as well as numerous real estate properties and luxury items purchased with the proceeds.
A dentist fraudulently obtained nearly $8 million in pandemic relief funds and used the money for personal expenses. https://t.co/VQabhgYM2S
— The ACFE (@TheACFE) December 17, 2021
One of the best-known programs created through the March 2020 CARES Act, PPP offered low-interest, forgivable loans to small businesses struggling to meet payroll and other expenses during pandemic-related shutdowns.
PPP loans were sold as being a bailout for small businesses, but more than 500 larger businesses got hundreds of millions in PPP loans & had them forgiven – many of those businesses are tied to billionaires or politicians.
Another handout to the rich.
— Salem Snow (@Salem4Congress) December 14, 2021
Early in the pandemic, law enforcement was more focused on fraud related to personal protective equipment, the Secret Service said. Authorities have now prioritized the exploitation of pandemic-related relief because the federal funding through the CARES Act attracted the attention of individuals and organized criminal networks worldwide.