Feds Arrest 300 in COVID Aid Fraud Schemes Totaling $830 Million. Just $300 Billion to Go.

AP Photo/Susan Walsh

There will never be a full accounting of COVID-19 aid fraud in the United States. Part of the reason is that no one in government really wants to know. The fact that the supposed guardians of the public purse got away with such incredible incompetence with few, if any, federal employees losing their jobs is criminal.

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The best guess regarding losses of taxpayer money to fraud is $300 billion and rising. There’s at least another $125 billion that budget watchdogs considered “wasted.” Whose heads are rolling?

Not Julie Su, the former head of the California Labor and Workforce Development Agency whose department doled out $180 billion in unemployment claims during the pandemic. Of that $180 billion, more than $32 billion was fraudulently given out. At least $2 billion went to inmates in various state prisons despite the criminals being ineligible for the cash. But Ms. Su is being rewarded for her incompetence and stupidity by being nominated to serve as Secretary of Labor.

“If you open up the bank window and say, give me your application and just promise me you really are who you say you are, you attract a lot of fraudsters and that’s what happened here,” Michael Horowitz, the Justice Department’s inspector general, told the AP.

That same Justice Department is crowing about what they’re calling a “COVID fraud sweep” where 300 people were arrested for stealing a grand total of $830 million. That’s a drop in the bucket — a bucket the size of Texas, perhaps.

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CNBC:

In one case, 30 members of a street gang in Wisconsin allegedly used money from an unemployment fraud scheme to solicit murder for hire and purchase firearms and drugs, said Deputy Attorney General Lisa Monaco at a roundtable meeting of law enforcement officials Wednesday.

In another case, four people were charged in an international pandemic relief fraud and money laundering scheme involving Nigeria, Monaco said.

Damn! Maybe that “Nigerian Prince” from that email needed help in washing his money after all.

Many of the individuals targeted in the sweep are accused of fraudulently applying for assistance through the Paycheck Protection Program and Economic Injury Disaster Loans used to support small businesses during the pandemic, according to a DOJ press release.

A government watchdog estimated in June that fraudsters may have stolen more than $200 billion in loans intended for struggling businesses, or 17% of the $1.2 trillion disbursed in total.

The Paycheck Protection Program fraud estimate is $64 billion. The Economic Injury Disaster Loan program fraud estimate is more than $136 billion, which represents 33% of the total money spent. Two programs and more than $200 billion in fraud — and they’re still counting.

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Don’t worry about the California and other inmates from other states. The Justice Department is on it!

“We will seek judicial orders requiring convicted defendants to pay back every stolen dollar and we have 20 years to realize those recoveries,” said Deputy Attorney General Lisa Monaco at a roundtable meeting of law enforcement officials Wednesday.

If the government ever does get to the bottom of how much COVID aid was stolen, we probably won’t be alive to see it.

“I don’t see an end,” said Mike Galdo, the department’s acting director for COVID-19 Fraud Enforcement. “Based on what we’ve seen from the scope of the fraud, I don’t see an end to our work.”

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