WASHINGTON – More than 1,000 people have pleaded guilty or have been convicted on federal charges of defrauding the myriad COVID-19 relief programs that Congress put in place in the early days of the pandemic. And more than 600 other people and organizations face it federal fraud allegations.
But that’s just the beginning, according to investigators who are scheduled to testify before a congressional committee on Wednesday, as House Republicans mark the beginning of what they promise to be aggressive oversight of President Joe Biden’s administration.
The House Committee on Oversight and Accountability holds its first hearing in the new Congress on fraud and waste in federal spending on pandemics. Congress approved approximately $4.6 trillion in spending from six coronavirus relief bills, beginning in March 2020 when Donald Trump was president.
“We owe it to the American people to get to the bottom of the greatest theft of American taxpayer dollars in history,” said committee chairman Rep. James Comer, R-Ky.
The Government Accountability Office is expected to tell the committee that the number of suspected fraud cases is certain to increase in the coming months. For example, the Small Business Administration’s inspector general has more than 500 ongoing investigations related to loan programs designed to help businesses meet operating costs during the pandemic. The Department of Labor’s Inspector General continues to open at least 100 investigations into unemployment insurance fraud each week.
GAO said the more than 1,000 convictions related to COVID-19 aid fraud were a measure of how extensive it was. How much money was lost through fraud? That’s unknown, GAO said, but it reported in December that extrapolating Labor Department data during the pandemic would suggest more than $60 billion in fraudulent unemployment insurance payments. GAO also warned that such an extrapolation has inherent limitations and should be interpreted with caution.
Still, lawmakers are keen to determine how many thefts have occurred and what can be done to stop them in future emergencies.
“We need to find out where that money went, how much ended up in the hands of scammers or ineligible participants and what should be done to ensure this never happens again,” Comer said.
About 20 general inspectors are working together to examine pandemic relief spending. Michael Horowitz, chairman of a committee created in March 2020 to oversee COVID-19 spending, is also scheduled to testify.
In his prepared remarks, Horowitz said the committee this week issued a fraud alert regarding the use of more than 69,000 questionable Social Security numbers to obtain $5.4 billion in pandemic loans and grants.
Also testifying is David Smith, an assistant director of the Office of Investigations at the US Secret Service, who predicts efforts to recover stolen assets and hold criminals accountable for pandemic fraud will continue for years to come.
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