More than $200 billion potentially stolen from US COVID relief programs, watchdog says

WASHINGTON, June 27 (Reuters) – More than $200 billion of the U.S. government’s COVID-19 relief programs was potentially stolen, a federal watchdog said on Tuesday, adding that the Small Business Administration US Corporations (SBA) had loosened its controls in a rush to disburse the funds.

At least 17% of all funds related to the government’s Economic Injury Disaster Loan (EIDL) and coronavirus Paycheck Protection Program (PPP) schemes were disbursed to potentially fraudulent actors, according to a report. report released Tuesday by the SBA’s Office of Inspector General.

Over the course of the pandemic, the SBA disbursed about $1.2 billion of EIDL and PPP funds.

The SBA disputed the more than $200 billion figure put forward by the watchdog, saying the inspector general’s approach had significantly overestimated fraud.

The agency said its experts estimated potential fraud at $36 billion, adding that more than 86% of that likely fraud took place in 2020, when former President Donald Trump’s administration was in office. President Joe Biden took office in January 2021.

The fraud estimate submitted by the inspector general for the EIDL program was more than $136 billion, while the PPP fraud estimate was $64 billion.

The United States is probing many fraud cases linked to US government assistance programs. In May 2021, Attorney General Merrick Garland launched a COVID-19 Fraud Control Task Force.

Last year, the US Department of Justice appointed United States Attorney Kevin Chambers to lead its efforts to investigate alleged fraud schemes intended to defraud government pandemic assistance programs.

In September 2022, the US Department of Labor Inspector General said that scammers probably stole $45.6 billion of the US unemployment insurance program during the coronavirus outbreak by applying tactics such as using Social Security numbers of deceased individuals.

Also in September, federal prosecutors indicted dozens of defendants, who were accused of stealing $250 million from a government aid program that was supposed to feed children in need during the pandemic.

Earlier this year, a separate surveillance report said the US government. awarded about $5.4 billion in aid for COVID-19 to people with questionable Social Security numbers.

(This story has been corrected to reflect the potential fraud agency’s assessment, unlikely, in the headline and paragraphs 1 and 5)

Reporting by Kanishka Singh in Washington; Edited by Aurora Ellis

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