Waste of the Day: Little COVID Fraud $ Recovered
Topline: The federal government, by its own estimate, has recouped less than one percent of the money lost to fraud during the Covid-19 pandemic, Open the Books found in a new report compiling official data from more than 20 relief programs.
Key facts: The Government Accountability Office estimates that “around $300 billion” in pandemic relief funds were stolen by fraudsters. Only $1.4 billion has been recovered, though the latest update was in 2024.
That means each American household lost an average of $2,260 in tax dollars to fraud during the pandemic, and has recovered just $10.55 of it.
The Paycheck Protection Program and the Economic Injury Disaster Loan programs were responsible for the bulk of the fraud. They were created to help unemployed Americans and struggling small businesses, but 17% of their $1.2 trillion price tag was lost to fraud.
An additional 40 to 50% of PPP payments were unverifiable, meaning there is a possibility they could have also been fraudulent.
Congress also created four new unemployment insurance programs during the pandemic. They lost at least $100 billion to fraud, according to the GAO
Federal law enforcement officials told NBC News in 2021 that half of all stolen COVID aid went to criminals in China, Russia and Nigeria.
Background: Some of the schemes generated hilarious headlines that underscore the seriousness of the fiscal losses.
Carl Delano Torjagbo, a business owner in Georgia, obtained federal aid by falsely claiming his company had 493 employees. His application listed fictional characters like Charlie Brown and Nancy Drew, and celebrities like Keanu Reeves and Gene Hackman. He used the money to buy a Lamborghini, a 72-foot yacht and more.
Torjagbo was sentenced to 15 years in prison earlier
Other fraudsters have been caught buying Porsches and a Mercedes-Benz or leasing luxury apartments
Summary: Pandemic-era relief programs will be remembered as some of the most fraud-ridden in U.S. history, but that does not mean it is too late to claw back misappropriated funds.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
