Reports Allege $200 Billion Stolen in COVID-19 Relief

More than US$200 billion in COVID-19 relief loans and grants for small businesses may have been stolen, according to the U.S. Small Business Administration (SBA).

The report, published last week, marks the highest estimate yet in the office’s ongoing investigation into federally funded programs that helped small business owners and entrepreneurs in the wake of the pandemic.

The report states that at least 17% of the $1.2 trillion disbursed through the SBA’s pandemic assistance loan programs were potentially stolen by fraudulent actors. The fraud in the COVID-19 Economic Injury Disaster Loan program is more than $136 billion—representing 33% of total disbursed funds—and the Paycheck Protection estimate is $64 billion.

These numbers are a significant increase in previous fraud estimates. The SBA inspector general previously estimated fraud in the COVID-19 disaster loan program at $86 billion and the Paycheck Protection program at $20 billion.

USA Today reported that the SBA Office of the Inspector General has investigated over 1,000 cases since March 2020. The office said it anticipates changes in the potential fraud estimate and has already found over $400 billion worth of loans that need further investigation.

Last year, the Biden administration sought to strengthen oversight of more than $5 trillion in pandemic relief funding passed by Congress over the past two years. The administration also announced a series of measures earlier this year, targeting the fraudsters who stole billions in pandemic relief funds.

“I think the bottom line is regardless of what the (total fraud) number is, it emanates overwhelmingly from three programs that were designed and originated in 2020 with too many large holes that opened the door to criminal fraud,” Gene Sperling, the White House American Rescue Plan coordinator, told the Associated Press.