A groundbreaking report published on Monday revealed that over $400 billion of COVID aid has been lost to fraud or wasted spending under the administrations of both Donald Trump and Joe Biden. The report, conducted by the Associated Press, exposes how fraudsters and criminals exploited funds that were allocated to prevent economic collapse during the pandemic.
According to the analysis, approximately $280 billion in COVID relief funding was lost due to fraud, with an additional $123 billion wasted or misspent. These amounts account for 10 percent of the $4.2 trillion that the U.S. government has allocated thus far for coronavirus aid.
The money was set aside to compensate businesses affected by successive COVID-19 lockdowns
According to the Associated Press, fraudsters exploited the system by using social security numbers of deceased individuals or federal prisoners to claim unemployment checks. The report also reveals that some individuals were able to collect benefits from multiple states.
Investigators have criticized the U.S. government for failing to provide sufficient oversight during the early stages of the pandemic. They argue that there were too few restrictions placed on applicants, allowing fraudsters easy access to relief funds meant for hardworking Americans.
‘Here was this sort of endless pot of money that anyone could access,’ said Dan Fruchter, a top anti-fraud official at the U.S. Attorney’s office in Washington. ‘Folks kind of fooled themselves into thinking that it was a socially acceptable thing to do, even though it wasn’t legal,’ he told the AP.
Over 2,230 defendants have been charged with pandemic-related fraud crimes, and thousands of investigations are ongoing.
The majority of the misappropriated funds came from three large pandemic relief initiatives launched during the Trump administration and continued under President Biden. These programs were intended to assist small businesses and unemployed workers affected by the economic downturn caused by the coronavirus.
Donald Trump signed off on more than $3 trillion in COVID-related bailout aid, according to official figures
Joe Biden signed a law in August that extended the statute of limitations for fraud-related crimes
Former President Donald Trump authorized emergency aid totaling $3.2 trillion, while President Joe Biden’s American Rescue Plan approved an additional $1.9 trillion. Approximately one-fifth of the total $5.2 trillion remains to be distributed, according to the most recent accounting by the committee.
The Small Business Administration, previously an obscure organization, was forced to handle nearly a trillion dollars in COVID aid due to the pandemic. Prior to the outbreak, the SBA had only disbursed $67 billion in disaster loans over a span of seven decades. However, when the pandemic hit, the SBA took charge of managing the COVID-19 Economic Injury Disaster Loan and Paycheck Protection programs. The urgent need to assist struggling businesses and employees resulted in a less rigorous application process.
‘If 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’s what happened here,’ said Michael Horowitz, the U.S. Justice Department inspector general investigating COVID-related fraud.
Due to the massive scale of fraud, legislation was signed in August to extend the statute of limitations for fraud-related crimes in relation to the SBA-managed programs.
According to the Centers for Disease Control and Prevention, over 1.13 million people in the U.S. have died from COVID-19.
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