The Secret Service said Friday that it has recovered $286 million in Covid relief funds that were meant for small businesses but were siphoned off by fraudsters using thousands of stolen or fake identities.
The conspirators used fake identities to apply for Covid relief funds known as Economic Injury Disaster Loans (EIDL), and created 15,000 accounts at Green Dot Bank, an online institution in Texas, to try to access the money using debit cards.
Green Dot notified the Secret Service when it discovered suspicious accounts, and the EIDL money was returned to the Small Business Administration, which had administered the relief funds.
Assistant Special Agent in Charge Roy Dotson, the lead pandemic fraud investigator for the Secret Service, said at a news conference Friday that there are “many actors” and a “myriad of potential suspects behind the fraud,” and believes there could be domestic and international co-conspirators.
“This is not going to be a quick fix,” said Dotson, speaking of the broad sweep of Covid relief fraud. “This is one case. …It’s going to be a long process.”
As federal and state governments raced to get money out the door to keep the economy afloat, many safeguards were overlooked. Estimates of the total amount of fraudulently obtained federal, state and local Covid relief money start at about $100 billion and top $500 billion.
Experts say will likely take years to account for the full scope of the fraud.
The SBA’s Office of Inspector General said on Friday that it had identified an estimated $87 billion in potential fraud in the EIDL program — more than 20 percent of the $390 billion disbursed. NBC News reported that as much as $80 billion of the $800 billion handed out in another Covid relief plan known as the Paycheck Protection Program, or PPP, might have been stolen.
Fraudsters may have taken as much $400 billion from the $900 billion Covid unemployment relief program, NBC News reported last year.
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