WASHINGTON (AP) \u2014 Much of the theft was brazen, even simple.<\/p>\n\n\n\n
Fraudsters used the Social Security numbers of dead people and federal prisoners to get unemployment checks. Cheaters collected those benefits in multiple states. And federal loan applicants weren\u2019t cross-checked against a Treasury Department database that would have raised red flags about sketchy borrowers.<\/p>\n\n\n\n
Criminals and gangs grabbed the money. But so did a 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.<\/p>\n\n\n\n
All of it led to the greatest grift in U.S. history, with thieves plundering billions of dollars in federal COVID-19 relief aid intended to combat the worst pandemic<\/a> in a century and to stabilize an economy in free fall.<\/p>\n\n\n\n An Associated Press analysis found that fraudsters potentially stole more than $280 billion in COVID-19 relief funding; another $123 billion was wasted or misspent. Combined, the loss represents 10% of the $4.2 trillion the U.S. government has so far disbursed in COVID relief aid.<\/p>\n\n\n\n That number is certain to grow as investigators dig deeper into thousands of potential schemes.<\/p>\n\n\n\n How could so much be stolen? Investigators and outside experts say the government, in seeking to quickly spend trillions in relief aid, conducted too little oversight during the pandemic\u2019s early stages and instituted too few restrictions on applicants. In short, they say, the grift was just way too easy.<\/p>\n\n\n\n \u201cHere was this sort of endless pot of money that anyone could access,\u201d said Dan Fruchter<\/a>, chief of the fraud and white-collar crime unit at the U.S. Attorney\u2019s office in the Eastern District of Washington<\/a>. \u201cFolks kind of fooled themselves into thinking that it was a socially acceptable thing to do, even though it wasn\u2019t legal.\u201d<\/p>\n\n\n\n The U.S. government has charged more than 2,230 defendants with pandemic-related fraud crimes and is conducting thousands of investigations.<\/p>\n\n\n\n Most of the looted money was swiped from three large pandemic-relief initiatives launched during the Trump administration and inherited by President Joe Biden. Those programs were designed to help small businesses and unemployed workers survive the economic upheaval caused by the pandemic.<\/p>\n\n\n\n The pilfering was wide but not always as deep as the eye-catching headlines about cases involving many millions of dollars. But all of the theft, big and small, illustrates an epidemic of scams and swindles at a time America was grappling with overrun hospitals, school closures and shuttered businesses. Since the pandemic began in early 2020, more than 1.13 million people in the U.S. have died from COVID-19<\/a>, according to the Centers for Disease Control and Prevention.<\/p>\n\n\n\n Michael Horowitz, the U.S. Justice Department inspector general<\/a> who chairs the federal Pandemic Response Accountability Committee, told Congress the fraud is \u201cclearly in the tens of billions of dollars\u201d and may eventually exceed $100 billion.<\/p>\n\n\n\n Horowitz told the AP he was sticking with that estimate, but won\u2019t be certain about the number until he gets more solid data.<\/p>\n\n\n\n \u201cI\u2019m hesitant to get too far out on how much it is,\u201d he said. \u201cBut clearly it\u2019s substantial and the final accounting is still at least a couple of years away.\u201d<\/p>\n\n\n\n Mike Galdo, the U.S. Justice Department\u2019s acting director for COVID-19 Fraud Enforcement, said, \u201cIt is an unprecedented amount of fraud.\u201d<\/p>\n\n\n\n Before leaving office, former President Donald Trump approved emergency aid measures totaling $3.2 trillion, according to figures from the Pandemic Response Accountability Committee<\/a>. Biden\u2019s 2021 American Rescue Plan authorized the spending of another $1.9 trillion. About a fifth of the $5.2 trillion has yet to be paid out, according to the committee\u2019s most recent accounting.<\/p>\n\n\n\n Never has so much federal emergency aid been injected into the U.S. economy so quickly. \u201cThe largest rescue package in American history,\u201d U.S. Comptroller General Gene Dodaro told Congress.<\/p>\n\n\n\n The enormous scale of that package has obscured multibillion-dollar mistakes.<\/p>\n\n\n\n An $837 billion IRS<\/a> program, for example, succeeded 99% of the time in getting economic stimulus checks to the proper taxpayers, according to the tax agency. Nevertheless, that 1% failure rate translated into nearly $8 billion going to \u201cineligible individuals,\u201d a Treasury Department inspector general told AP.<\/p>\n\n\n\n An IRS spokesman said the agency does not agree with all the figures cited by the watchdog and noted that, even if correct, the loss represented a tiny fraction of the program\u2019s budget.<\/p>\n\n\n\n The health crisis thrust the Small Business Administration<\/a>, an agency that typically gets little attention, into an unprecedented role. In the seven decades before the pandemic struck, for example, the SBA had doled out $67 billion in disaster loans.<\/p>\n\n\n\n When the pandemic struck, the agency was assigned to manage two massive relief efforts \u2014 the COVID-19 Economic Injury Disaster Loan and Paycheck Protection programs, which would swell to more than a trillion dollars. SBA\u2019s workforce had to get money out the door, fast, to help struggling businesses and their employees. COVID-19 pushed SBA\u2019s pace from a walk to an Olympic sprint. Between March 2020 and the end of July 2020, the agency granted 3.2 million COVID-19 economic injury disaster loans totaling $169 billion, according to an SBA inspector general\u2019s report, while at the same time implementing the huge new Paycheck Protection Program.<\/p>\n\n\n\n In the haste, guardrails to protect federal money were dropped. Prospective borrowers were allowed to \u201cself-certify\u201d that their loan applications were true. The CARES Act also barred SBA from looking at tax return transcripts that could have weeded out shady or undeserving applicants, a decision eventually reversed at the end of 2020.<\/p>\n\n\n\n \u201cIf you open up the bank window and say, give me your application and just promise me you really are who you say you are, you attract a lot of fraudsters and that\u2019s what happened here,\u201d Horowitz said.<\/p>\n\n\n\n The SBA inspector general\u2019s office has estimated fraud in the COVID-19 economic injury disaster loan program at $86 billion and the Paycheck Protection program at $20 billion. The watchdog is expected in coming weeks to release revised loss figures that are likely to be much higher.<\/p>\n\n\n\n In an interview, SBA Inspector General Hannibal \u201cMike\u201d Ware declined to say what the new fraud estimate for both programs will be.<\/p>\n\n\n\n \u201cIt will be a figure that is fair, that is 1,000% defensible by my office, fully backed by our significant criminal investigative activity that is taking place in this space,\u201d Ware said.<\/p>\n\n\n\n Ware and his staff are overwhelmed with pandemic-related audits and investigations. The office has a backlog of more than 80,000 actionable leads, close to a 100 years\u2019 worth of work.<\/p>\n\n\n\n \u201cDeath by a thousand cuts might be death by 80,000 cuts for them,\u201d Horowitz said of Ware\u2019s workload. \u201cIt\u2019s just the magnitude of it, the enormity of it.\u201d<\/p>\n\n\n\n A 2022 study from the University of Texas at Austin found almost five times as many suspicious Paycheck Protection loans as the $20 billion SBA\u2019s inspector general has reported so far. The research, led by finance professor John Griffin, found as much as $117 billion in questionable and possibly fraudulent loans, citing indicators such as non-registered businesses and multiple loans to the same address.<\/p>\n\n\n\n Horowitz, the pandemic watchdog chairman, criticized the government\u2019s failure early on to use the \u201cDo Not Pay\u201d Treasury Department database, designed to keep government money from going to debarred contractors, fugitives, felons or people convicted of tax fraud. Those reviews, he said, could have been done quickly.<\/p>\n\n\n\n \u201cIt\u2019s a false narrative that has been set out, that there are only two choices,\u201d Horowitz said. \u201cOne choice is, get the money out right away. And that the only other choice was to spend weeks and months trying to figure out who was entitled to it.\u201d<\/p>\n\n\n\n In less than a few days, a week at most, Horowitz said, SBA might have discovered thousands of ineligible applicants.<\/p>\n\n\n\n \u201c24 hours? 48 hours? Would that really have upended the program?\u201d Horowitz said. \u201cI don\u2019t think it would have. And it was data sitting there. It didn\u2019t get checked.\u201d<\/p>\n\n\n\n The Biden administration put in place stricter rules to stem pandemic fraud, including use of the \u201cDo Not Pay\u201d database. Biden also recently proposed a $1.6 billion plan to boost law enforcement efforts to go after pandemic relief fraudsters.<\/p>\n\n\n\n