U.S. watchdog identifies $5.4 billion in potentially fraudulent COVID-19 loans

WASHINGTON, Jan 30 (Reuters) – The U.S. government may provide about $5.4 billion in COVID-19 aid to people with problematic Social Security numbers, federal regulators said in a report released on Monday.

The regulator, the Pandemic Response Accountability Committee (PRAC), said it “identified 69,323 suspicious Social Security Numbers (SSNs) that were used in Small Business Administration (SBA) COVID-19 Economic Injury Disaster Loans (COVID-19 EIDL) and the Paycheck Protection Program (PPP).”

The loans were made between April 2020 and October 2022, the watchdog said in its report, which comes ahead of a hearing on pandemic spending fraud scheduled for Wednesday by the Republican-led House Oversight Committee. previously issued.

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By August 2020, some 57,500 Paycheck Protection Program forgivable loans worth $3.6 billion had been disbursed, the report added.

The U.S. is investigating a number of fraud cases related to U.S. government aid programs such as the Paycheck Protection Program, unemployment insurance and Medicare. In May 2021, Attorney General Merrick Garland established a COVID-19 Fraud Enforcement Task Force.

Last year, the U.S. Justice Department appointed U.S. Attorney Kevin Chambers to lead an investigation into fraudsters who used the pandemic as a pretext to defraud government aid programs.

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The report demonstrates “the extent to which significant fraud and identity theft occurred under the previous administration due to the lack of basic anti-fraud controls, and the consequences of the Biden administration’s swift action to restore strong anti-abuse measures in these emergency small businesses, Gene Sperling, a senior adviser to President Joe Biden, said in an emailed statement.

The regulator’s report mentions improvements to the SBA’s controls over its assistance programs in 2021. Biden took office in January of that year.

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In September, the U.S. Labor Department’s inspector general said fraudsters may have stolen $45.6 billion from the U.S. unemployment insurance program during the coronavirus outbreak through tactics such as using deceased individuals’ Social Security numbers.

Also in September, federal prosecutors indicted dozens of defendants accused of stealing $250 million from a government aid program that was supposed to feed children in need during the pandemic.

Reporting by Kanishka Singh in Washington; Editing by David Gregorio and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.


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