Inspector General: COVID Relief Programs Were ‘Invitation’ To Fraudsters


Dylan Housman Deputy News Editor
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Department of Justice Inspector General Michael Horowitz told NBC’s Lester Holt that relief programs for the COVID-19 pandemic were an “invitation” for fraudsters to steal money.

Up to $579 billion could have been stolen in total from various COVID-19 relief programs, including $80 billion from the Paycheck Protection Program (PPP), $90 billion from the COVID-19 unemployment relief program and $80 billion from disaster relief funds, according to NBC News. Officials say $600 billion more is set to be distributed still, and the Biden administration is asking Congress to spend even more in a new round of pandemic relief funding.

“The Small Business Administration, in sending that money out, basically said to people, ‘Apply and sign and tell us that you’re really entitled to the money,'” Horowitz said in the interview. “And, of course, for fraudsters, that’s an invitation. … What didn’t happen was even minimal checks to make sure that the money was getting to the right people at the right time.”

Some criminals used fake or stolen identities to claim up to $30,000 per identity in unemployment funding, while others invented new companies that didn’t actually exist to claim PPP loans. Those loans were forgiven if the money was used for business expenses, and lenders did little to verify who was getting those loans and what they were spent on.

The Small Business Administration explicitly waived liability for lenders if fraud was committed in an attempt to get money out faster, a move the Government Accountability Office warned would invite fraud and waste. (RELATED: Attorney General Assembles Task Force To Hunt Down COVID-19 Fraud)

Only 178 people have been convicted nationwide in PPP fraud cases so far, although more charges are still pending. The SBA said it “takes fraud seriously, and, as such, all applicants are required to provide certification of their eligibility upon application.”