UNITED States prosecutors are investigating “the largest fraud in US history” — billions of taxpayer dollars for coronavirus aid stolen and used to buy luxury cars and mansions.
Experts estimate the total stolen at $80bn, 10 percent of the $800bn in a Covid relief plan known as the Paycheck Protection Programme, or PPP. That doesn’t include $90bn to $400bn believed to have been diverted from the $900bn Covid unemployment relief programme. Another $80bn was taken from a separate relief programme. Government watchdogs are now scrambling to stop the rot, but most of the losses are considered unrecoverable.
Justice Department inspector-general Michael Horowitz, who oversees Covid relief spending, said in a recent interview that relief programmes were “structured in ways that made them ripe for plunder”.
The swindle was sometimes carried out by organised crime groups using stolen identities to claim jobless benefits — each worth up to $30,000. The PPP scheme authorised financial institutions to make government-backed loans to businesses — to be written-off if the money was spent on business expenses.
Nearly 10 million such loans were granted, many for millions of dollars. The Government Accountability Office warned of fraud risk, but the programme continued. Fraudulent borrowers inflated employee numbers or listed non-existent companies. The SBA has identified $78.1bn in potentially fraudulent Economic Injury Disaster Loans, another Covid relief programme. The Secret Service estimates the total at $100bn.
The Pandemic Response Accountability Committee is unleashing AI and deploying teams of data scientists to search the 150 million loan records for fraud patterns.
One fraudster, Miami resident David Hines, recently admitted to stealing $3.9m. He bought a Lamborghini valued at $318,000, stayed at luxury hotels, and lashed out on high-end jewellery.
Just 178 people have been convicted in Paycheck Protection Programme fraud cases. More prosecutions are due.