U.S.

House GOP launches investigation into fraud involving billions in COVID pandemic relief money


Beginning its investigations into the Biden administration on Wednesday, the Republican-led House Oversight Committee will hold a hearing on the COVID relief funds spent during the pandemic, which Republicans say is a “recipe for waste, fraud and abuse ” and has been ignored by Democrats in the last two years of the Biden administration.

“We owe it to the American people to get to the bottom of the largest theft of American taxpayer dollars in history,” Republican Chairman James Comer of Kentucky will tell the committee, according to prepared remarks shared with ABC News.

“We need to identify where that money went, how much ended up in the hands of fraudsters or inappropriate actors and what needs to be done to ensure that this never happens again,” Comer is expected to say in his opening remarks.

About $5 trillion was set aside for pandemic response and recovery under the Trump and Biden administrations, and nearly 90 percent of that was spent by last November, according to the Government Accountability Office.

The committee intends to evaluate this money, which has been distributed largely in grants, loans and unemployment insurance, so as to “ensure that these funds have been used appropriately to respond to the pandemic and not wasted on impermissible recipients or unrelated matters,” according to Comer’s remarks.

The commission will hear testimony from three nonpartisan groups that have been tracking fraud since the COVID-19 era on Wednesday, each finding billions of dollars of money that was stolen from programs meant to help people during the peak of the pandemic.

One of those groups, the Pandemic Response Accountability Committee, reported Monday that more than $5 billion in pandemic aid that was supposed to reach small businesses suffering from COVID-19 shutdowns may have been eaten up instead from fraudsters.

The report found that in a rush to get help out the door, the Small Business Administration awarded billions of dollars in Payroll Protection Program (PPP) and Economic Injury Loan (EIDL) to applicants who used Social Security numbers that in after all, they do not match the person who applied.

“We found 69,000 to be questionable [social security numbers] were used to obtain $5.4 billion in pandemic loans and that another 175,000 questionable [social security numbers] were used in applications that were not paid for or approved,” Michael Horowitz, chairman of the Pandemic Response Accountability Committee (PRAC), is expected to tell the Oversight Committee on Wednesday, according to prepared remarks.

The right checks and balances were not put in place in time, the PRAC found, but there was huge pressure to get huge sums of money quickly to businesses that were on the brink due to disruptions due to COVID-19.

The result was that many pandemic relief programs were left open to fraud.

That conclusion will be echoed by David Smith, assistant director of the Office of Investigations within the US Secret Service, which oversees criminal investigations into COVID-19 benefit fraud.

“My colleagues and I have seen and opposed the full spectrum of fraud related to the pandemic to date,” Smith is expected to tell the committee, according to a copy of his remarks shared with ABC News.

“From under-mask N-95 schemes to synthetic accounts used in identity theft scams to apply for millions of dollars in loans. From medical facilities targeted by ransomware attacks in the midst of the pandemic to inmates applying for unemployment benefits,” Smith is expected to say.

And while “similar dynamics” have been seen in other major relief efforts and natural disasters that leave ripe opportunities for scams and fraud, the money stolen during COVID “was and is significant,” Smith will say.

The Secret Service has seized more than $1.43 billion in funds obtained from fraudsters, Smith noted, with 2,300 investigations into unemployment insurance fraud and 2,900 investigations into loans and grants given to businesses.

More than 1,000 people have also been convicted, forced to pay back money or accused of defrauding the programs, although that work continues, according to Comptroller General Gene Dodaro of the Government Accountability Office, who will also testify before the Oversight Committee on Wednesday.

Just over 1,000 people have pleaded guilty and 38 people have been convicted of defrauding COVID-19 relief programs, Dodaro is expected to tell the committee.

“We found a range of internal control deficiencies across a wide range of programs and made many recommendations that the agencies are in the process of implementing,” Dodaro is expected to say.

Copyright © 2023 ABC News Internet Ventures.


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