Behind the Biggest Fraud of Our Time: More than $200 Billion of Your Tax Dollars Stolen From Two COVID Relief Programs
Scores of Americans used good-faith taxpayer funds to purchase everything from luxury cars, watches and mansions to gold coins, diamonds and designer handbags. Some drummed up fake businesses with the help of fraud pros who took a cut, others stole identities from the incarcerated, the imaginary and the dead, and then at least one couple claimed to be operating farms with a significant number of employees – only they lived in small homes in the middle of Miami. And then there were even a brazen few who took to YouTube and other social media sites to offer their services to others looking to steal in exchange for a percentage of the government’s check.
The moral of the story? The government rushed to give away your hard-earned dollars amid the COVID-19 pandemic to an unfathomable amount of crooked and criminal Americans with next to no diligence in what is now considered the biggest fraud in the history of the United States of America. While many legitimately required assistance to endure such a turbulent time, a frightening portion of the federal government’s $5 trillion in relief funds – issued under both President Trump and President Biden – went into the pockets of the greedy and the dishonest, preventing many of acquiring the help they genuinely needed.
According to the most recent report from the inspector general of the Small Business Administration, it is likely that more than $200 billion of your dollars was lost to scams via two COVID relief programs, The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 created to provide urgent assistance suffering from the sudden financial hardship, including small business loans for employment retention that fell under the umbrella of the Paycheck Protection Program (PPP), and the Economic Injury Disaster Loans (EIDLs) for eligible small businesses facing economic disruption.
The report highlights that at least 17 percent of PPP and EIDL went to criminal actors.
Mind you; these estimates are in addition to the up to $400 billion potentially pilfered from the COVID unemployment relief program, of which at least half the theft is surmised to have been stolen by international charlatans, and a further $80 billion from another pandemic-era disaster relief program.
So, what on earth went wrong?
First and foremost, the government rushed out in the heat of the moment without even the most basic checks in place to ensure that the money was going to those who legitimately needed it and that the applicants were who they said they were. Officials sought to make the process so smooth that few vetting procedures were implemented.
Moreover, the program granted banks and financial institutions the authority to issue government-backed loans to businesses, designed to be forgiven, providing those businesses devoted the funds solely to business expenses, enabling large-scale schemes for companies to inflate numbers wildly or even sanctify a company that doesn’t exist. There was no great skill to the fraud – people simply pinched the name of an existing business or hurriedly registered a new, FAKE one, with no mechanisms in place to verify the start date or authenticity.
The whole thing was so absurd that lawyers for defendants accused of committing pandemic fraud contended in a court of law that the cases should be dismissed or adjudicated tenderly because the government essentially made filching so shockingly effortless.
What is also maddening is that the generous handouts also enabled individuals to fund private pet projects or drive issues that had nothing to do with the nature of COVID relief.
In truth, nobody will ever be certain how much of your money was taken. Most losses are also considered unrecoverable. As it stands, roughly five hundred case officers are digging into pandemic grafting across the United States. President Biden recently extended the statute of limitations from five years to ten in hopes of holding more thieves to account. However, officials widely acknowledge that many more have and will get away with their blatant looting for every person charged, as Justice Department resources can only extend so far.
It is a pretty sick feeling to know how much money was purloined as a U.S. taxpayer, how hard it is in this day and age to find the honest and the trustworthy in our own neighborhoods, and the lack of oversight from both administrations that should have known better.
But what also makes my blood boil is that lenders had to cease granting PPP loans when the money ran out even though many still sought the assistance. This meant the swindler among us not only deceived the U.S. taxpayer, but wounded those Americans in need.
Let’s hope we learn from these mistakes.
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