You may not know this, but the Secret Service, which protects US presidents and other elected officials, also has the job of investigating counterfeit money and financial fraud.
They reported on Friday, August 28, that $286 million of COVID relief funds were recovered that were stolen by fraudulent entities, using stolen or fake identities via Green Dot Bank.
The made-up identities were used to make applications for COVID relief funds as part of the Economic Injury Disaster Loans (EIDL) program. Fraudsters created 15,000 accounts online at Green Dot Bank in Texas, using debit cards to obtain the loan money. The bank notified the Secret Service about the suspicious accounts, and the money was recovered and returned to the Small Business Administration (SBA), the administrator of the program’s funds.
The agent in charge of the investigation, Assistant Special Agent in Charge, Roy Dotson, said at a news conference Friday that there are many people responsible for the scam, and many more suspected potential scammers, believed to be not only domestic but also international co-conspirators.
“This is not going to be a quick fix,” said Dotson. “This is one case. …It’s going to be a long process.”
It has been acknowledged that due to the pandemic emergency, and the need for businesses to be helped right away, many federal and state governments overlooked safeguards, resulting in fraud which is estimated to be up to $500 billion. Shockingly, that impulsive carelessness on the part of governments has resulted in massive losses that will take years to account for, and it is uncertain if the money can ever be fully recovered.
On Friday, the Office of Inspector General for the SBA said that at least $87 billion fraud in the EIDL program has been identified. That is more than 20 percent of the total $390 that was disbursed to the public.
In another COVID relief program, the Paycheck Protection Program, it is estimated that at least ten percent of the $800 billion disbursed might have been stolen via fraud and conspiracy.
It is also suspected that $400 billion was stolen by fraudsters from the COVID unemployment relief program, according to a report by NBC News last year.
According to the Secret Service, their staff and the SBA have been able to seize more than $1 billion already. They state that online activities are responsible for most of the fraud and that cyber criminals are getting very good at taking advantage of money designed to assist struggling people when they most need it.
As a result of the mishandling of pandemic funds, the Government Accountability Office has recommended several ways for agencies to prevent this type of fraud in the future, including improving their reporting on their fraud risk management efforts.
