'Fraudsters' stole over $200B from US Covid relief schemes

Over $200 billion from the US government's Covid-19 relief programmes were likely stolen, a federal watchdog has said, adding that the US Small Business Administration [SBA] had weakened its controls in a rush to disburse the funds.

At least 17 percent of all funds related to the government's coronavirus Economic Injury Disaster Loan [EIDL] and Paycheck Protection Program [PPP] schemes were disbursed to potentially fraudulent actors, according to a report released on Tuesday by the SBA's office of inspector general.

"We identified multiple schemes used by fraudsters to steal from the American taxpayer and exploit programmes meant to help those in need," the SBA report said.

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

The SBA disputed the more than $200 billion figure put forward by the watchdog and said the inspector general's approach had significantly overestimated fraud.

The agency said its experts put the likely fraud estimate at $36 billion and added that over 86 percent of that likely fraud took place in 2020, when the administration for former president Donald Trump was in office.

President Joe Biden took office in January 2021. The fraud estimate put forward by the inspector general for the EIDL programme stood at more than $136 billion, while the PPP fraud estimate was $64 billion.

The OIG's oversight and investigative work resulted in more than 1,000 indictments, and 529 convictions related to Covid fraud, according to the SBA.

These investigations have resulted in "nearly $30 billion in Covid-19 EIDL and PPP funds being seized or returned to SBA," the report found.

Fraud cases

The United States is probing many fraud cases pegged to US government assistance programmes.

In May 2021, Attorney General Merrick Garland launched a Covid-19 Fraud Enforcement Task Force.

Last year, the US Justice Department tapped federal prosecutor Kevin Chambers to lead its efforts to investigate alleged fraud schemes intending to bilk government pandemic assistance programmes.

In September 2022, the inspector general for the US Labor Department said fraudsters likely stole $45.6 billion from the United States' unemployment insurance programme during the coronavirus outbreak by applying tactics like using Social Security numbers of deceased individuals.

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

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