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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

It has been known for a while that the CARES Act was susceptible to fraud. But the enormous scope of this issue and its disturbing implications just keeps growing. A recent Associated Press analysis has found that fraudsters potentially have stolen more than $280 billion in COVID-19 relief funding since 202. Another $123 billion was wasted or misspent. How the government actually defines “misspent” is even unclear. Either way, add those numbers together and taxpayers have been robbed of over $400 billion. A shocking 10% of the $4.2 trillion the U.S. government has disbursed in COVID-relief aid has been “misspent” on fraudsters. So far.

When the U.S. government rolled out the CARES Act it really did set the stage for easy fraud. In its rush to quickly get trillions in relief aid into the U.S. economy, the government instituted few restrictions to make sure that the money was getting to the right people at the right time with little or no thought on fully protecting federal money. The real integrity of the program relied on the honesty of the people applying. Prospective borrowers were asked to “self-certify” that their loan applications were true. Fraudsters love to self-certify! For whatever reason, the CARES Act also barred Small Business Administration from looking at tax return transcripts which would have weeded out undeserving applicants. The grift opportunity was just too easy here.

But as Paul Newman said in the Sting, “No sense in being a grifter if it is the same as being a citizen.” And with the endless amounts of CARES Act money available, citizens couldn’t help themselves from being on the fraud wagon. To date, the U.S. government has charged more than 2,230 defendants with pandemic-related fraud crimes. But they are conducting thousands of more investigations and the number of fraud cases is only going to go up.  

A shout out to the COVID-19 Enforcement Task Force for their tireless efforts to catch the fraudsters.

Today’s Fraud Of The Day is based on article “How $400 billion in COVID-19 aid was stolen or wasted, by everyone from social security fraudsters to Texas pastors” published by Fortune Magazine on June 12, 2023

The greatest grift in U.S. history was brazen, even simple. Criminals and gangs grabbed the money. So did an U.S. soldier in Georgia, the pastors of a defunct church in Texas, a former state lawmaker in Missouri and a roofing contractor in Montana.

Over the last three years, thieves plundered billions of dollars in federal COVID-19 relief aid intended to combat the worst pandemic in a century and to stabilize an economy in free fall.

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