A congressional committee investigating pandemic relief fraud is demanding that the Justice Department provide documents and information describing the extent to which international criminal groups plundered those programs, according to a letter obtained exclusively by NBC News.
The letter, from the Republican-controlled House Select Subcommittee on the Coronavirus Pandemic, asks Attorney General Merrick Garland to turn over “all documents and communications regarding metrics or estimates” of Covid relief program funds lost “due to fraud by international or overseas actors and criminal organizations,” including the number of cases and the total dollar amount of losses delineated by country of origin for the criminal actors.
The letter comes a week after the Labor Department released a new estimate pegging the total amount of fraud or unsupported payments in the pandemic unemployment program from March 2020 to September 2021 at nearly 40%, with estimated losses or questionable payments of $47.3 billion, out of a total of $131.6 billion. The report said the lack of verification systems and flaws in program design created a “perfect storm” that allowed criminal groups to steal benefits using fake identities at a massive scale.
Influencer pleads guilty to stealing identities, spending Covid relief money
In June, the inspector general for the Small Business Administration said as much as $200 billion had been stolen from programs administered by that agency, which does not include the unemployment relief.
The select committee, in estimating the total fraud in all pandemic relief programs, cited a figure of $280 billion, which came from a June investigation by The Associated Press headlined, “The Great Grift: How billions in COVID-19 relief was stolen or wasted.”
The committee letter cites two reports by NBC News, as part of its Fleecing of America series, documenting fraud in the unemployment relief program and in separate loan programs designed to help businesses pay workers. NBC News reported that Russian mobsters, Chinese hackers and Nigerian scammers have used stolen identities to plunder tens of billions of dollars in Covid benefits, spiriting the money overseas in a massive transfer of wealth from U.S. taxpayers, officials and experts say.
The Biden administration has allocated $1.6 billion to recover stolen relief money and prosecute fraudsters, and the Justice Department has made those cases a priority. But just as a matter of math, the DOJ lacks the resources to prosecute all but a small percentage of those who stole taxpayer funds. Justice Department officials point out that they have not received additional money from Congress to expand Covid fraud task forces, as promised by President Joe Biden in his 2022 State of the Union address.
Earlier this month, the Justice Department announced the results of what it called “a coordinated, nationwide enforcement action to combat COVID-19 fraud, which included 718 enforcement actions — including federal criminal charges against 371 defendants — for offenses related to over $836 million in alleged COVID-19 fraud” — a tiny fraction of the total amount stolen.
“Our work is far from done,” Deputy Attorney General Lisa Monaco said during a news conference. “We will continue to prosecute those who have committed pandemic relief fraud, at home and abroad. We will also continue to aggressively deploy our forfeiture and restitution tools in every case to recover stolen funds.”
Spread of Covid impacting start of classes for some schools across U.S.
Since the beginning of the pandemic, she said, the DOJ has brought criminal charges against nearly 3,200 defendants with alleged losses of nearly $1.7 billion and has seized around $1.4 billion in stolen relief funds. That is a tiny percentage of the total number of fraudsters and a sliver of the total amount stolen.
DOJ officials acknowledge that the prosecution of overseas criminals who stole Covid relief funds is particularly difficult, and experts say there is little chance the government will catch those perpetrators or recover much if any of that money. The Justice Department has not publicly disclosed an estimate of how much was stolen by international groups, other than to say it was a substantial amount. FBI Assistant Director Jay Greenberg told NBC News a “significant amount of money” went overseas, calling it “an economic attack on the United States.”
Officials and experts say the worst of the fraud occurred during the Trump administration as the pandemic was unfolding, as a result of poorly designed relief programs whose rules were written both by executive branch officials and Republicans and Democrats in Congress. In part because officials in both parties had a hand in the debacle, the issue has not taken hold as a major Washington scandal despite the enormity of the loss to taxpayers.
Rep. Brad Wenstrup, the Ohio Republican who chairs the select committee, said in the letter that the committee wants to “better understand the full scope of this problem and what actions the Department has taken to investigate international COVID-19 relief program fraud and hold these foreign actors accountable.”
