More than 1,000 people have pleaded guilty or been convicted on federal charges of defrauding the myriad COVID-19 relief programs Congress established in the early days of the pandemic. And more than 600 individuals and entities are facing federal fraud charges.
But that's just the beginning, according to investigators who will testify before a congressional committee on Wednesday, as House Republicans usher in what they promise will be aggressive oversight of President Joe Biden's administration.
The House Oversight and Accountability Committee is holding its first hearing in the new Congress on fraud and waste in federal spending due to the pandemic. Congress approved about $4.6 trillion in spending from six coronavirus relief bills, starting in March 2020 when Donald Trump was president.
“We owe it to the American people to get to the bottom of the biggest theft of American taxpayer dollars in history,” said Rep. James Comer, R-Ky., the committee chairman.
The Government Accountability Office is expected to tell the committee that the number of suspected fraud cases will likely increase in the coming months. For example, the Small Business Administration's inspector general has more than 500 ongoing investigations involving loan programs designed to help businesses cover operating expenses during the pandemic. The Department of Labor's inspector general continues to open at least 100 unemployment insurance fraud investigations every week.
The GAO said the more than 1,000 convictions related to COVID-19 relief fraud are a measure of how extensive it was. How much money was lost due to fraud? That's unknown, the GAO said, but it reported in December that an extrapolation of Labor Department data would suggest more than $60 billion in fraudulent unemployment insurance payments during the pandemic. The GAO also cautioned that such extrapolation has inherent limitations and should be interpreted with caution.
Still, lawmakers are eager to discern how much theft has occurred and what can be done to stop it in future emergencies.
“We need to identify where this money went, how much ended up in the hands of scammers or ineligible participants, and what needs to be done to ensure it never happens again,” Comer said.
Some 20 inspectors general are working collaboratively to investigate pandemic relief spending. Michael Horowitz, who chairs a committee created by Congress in March 2020 to lead oversight of COVID-19 spending, is also scheduled to testify.
In his prepared remarks, Horowitz said the committee issued a fraud alert this week regarding the use of more than 69,000 questionable Social Security numbers to obtain $5.4 billion in pandemic loans and grants.
Also testifying is David Smith, deputy director of the US Secret Service's Office of Investigations, who predicts that efforts to recover stolen assets and hold criminals accountable for pandemic fraud will continue for years to come.
