No one knows how much of COVID-19 government aid was stolen. Estimates range from a laughable $100 billion to a far more realistic $500 billion. That's 10% of the $5.2 trillion in COVID aid the government gave out from March 2020 to August 2022.
Given the large number of benefit programs, the amount may be far more than $500 billion.
Most of those fraudsters may get away with their crimes unless Congress extends the statute of limitations, which is expiring in March. Congress has tied itself up in partisan knots, and the deadline may pass before it gets everything sorted out.
There has been more than $100 billion (perhaps as much as $150 billion) in fraud relating to unemployment benefits. It was easily the most fraud-plagued government program in world history. As much as 20% of the Federal Pandemic Unemployment Compensation (FPUC) program from the CARES Act was stolen after FPUC added a weekly supplement of $600 to the amount individuals received in state unemployment.
You almost can't blame the criminals. There was no vetting of people who would receive the benefit. All they had to do was fill out forms and wait for the check. The government clerks would scan a list of fraudsters and other criminals to see if the applicant was on it. If not, the check was out the door and forgotten. The fraudster would collect that extra money month after month.
To use a Washington euphemism: The hogs were really feeding. Not since the UN's "Oil for Food" scandal had so many people stolen so much with so little effort. That scandal may have been as much as $50 billion stolen, but it doesn't come close compared to the COVID grift.
“Making the government more efficient isn’t a partisan issue — it’s an American issue,” Sen. James Lankford (R-Okla.) said. “Loopholes in the law let fraudsters get away with billions in COVID recovery and Unemployment Insurance payouts while forcing taxpayers to foot the bill.”
In December alone, prosecutors in Maryland announced indictments against two men accused of bilking more than $1 million by filing for unemployment benefits under stolen identities. Authorities said the scam lasted from March 2020 through September 2021.
In New York, prosecutors charged a man with using a stolen identity to claim benefits from September 2020 through March 2021.
In Massachusetts, federal prosecutors announced the Dec. 13 arrests of two Boston-area corrections officers on charges of bilking the unemployment system. One, Jasmine Murphy, attempted to alter her identity to prevent the government from realizing she was employed while collecting the unemployment benefits, prosecutors said.
Much of the money is unrecoverable because it was stolen by nation-states. Russia, North Korea, China, and other countries took full advantage of the stupidity and carelessness of the government.
Criminals in prison stole tens of millions of dollars. Ordinary people would claim benefits under the identities of several individuals and rake in hundreds of thousands of dollars.
The government's excuse is that this money had to get out immediately and reach the unemployed person ASAP. In this case, "haste made gargantuan waste."
Has anyone in government been fired for this travesty? I asked.
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.
Su was never confirmed, but she was "acting secretary" of the Labor Department for three years. Well done, Jules.
“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.
The slew of bills before the House extending the statute of limitations from five years to ten has been mired in procedural gimmicks and Democratic obstructionism.
Nearly all Democrats opposed portions of the bill. One provision trimmed money allocated to states to modernize their unemployment systems. Another would have required those who received overpayments, though not necessarily from fraud, to pay back the money.
“Don’t punish people who may be caught up in this net that was not of their making,” Rep. Earl Blumenauer, Oregon Democrat, said at the time.
Many bills introduced in the Senate have been bipartisan but have not received substantive action. One was introduced by Sen. Ron Wyden, Oregon Democrat, and Sen. Mike Crapo, Idaho Republican.
In Taiwan, China, and other Eastern countries, even if you weren't directly responsible for the fraud, you would go to prison. In the U.S., no one has even been demoted for this incompetence.
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