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Watchdog Group Finds Billions in Pandemic Relief Fraud

September 8, 2021

Although the U.S. government approved more than US$5 trillion in pandemic relief for businesses and workers during that pandemic, a federal watchdog group says much of that money may have found its way into the wrong hands, ABC-TV reports.

The Pandemic Response Accountability Committee, which was established as part of the $2.2 trillion coronavirus relief bill passed in March 2020, is responsible for overseeing a combined $5 trillion in pandemic relief funds authorized by Congress. The committee released a report that identified fraud within programs designed to aid small businesses and unemployed individuals.

The report found that the federal unemployment insurance program, which provided up to an additional $600 weekly along with regular state unemployment payouts, disbursed nearly $87 billion in fraudulent unemployment insurance payments before its expiration this month.

The report also pinpointed fraud in several types of loans under the coronavirus relief bills passed by Congress. For example, the watchdog group found issues with representation and fraud in the paycheck protection program (PPP), a relief measure that allowed small businesses to receive federal loans that would be forgiven if at least 60% of the borrowed funds were used to keep employees on the payroll. Failure to require the checking of applicants against a list of those ineligible to receive federal loans led to 57,500 PPP loans worth $3.6 billion being issued to potentially ineligible recipients, according to the report.

In addition, $918 million in Economic Injury Disaster Loans were given to potentially ineligible applicants. These loans were offered to small businesses that were established before the pandemic and could be used to pay normal business expenses.

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