Covid Fraud: A Staggering $600 Billion

COVID fraud is at this point a redundant phrase. Congress appropriated more than $5 trillion for COVID relief but almost $600 billion may have been lost to fraud — an astounding 12%. Washington’s pandemic pratfalls are the greatest federal boondoggle of this century.


Prosecutors are having a turkey shoot nailing COVID crooks: More than 1,500 have been indicted and almost 500 have been convicted. On September 14, the Justice Department announced the creation of three COVID-19 fraud strike force teams.

When President Biden recently signed a law to extend the time to prosecute COVID fraud, he declared, “My message to those cheats out there is this: You can’t hide. We’re going to find you.” But the sheer amount of fraud makes it unlikely that the vast majority of thieves will be charged.

Policymakers acted as if waiving standard federal fraud protections would somehow thwart the COVID virus. On September 22, the Labor Department inspector general estimated that COVID-19 unemployment fraud amounted to $45 billion and could exceed $163 billion.

“Overseas organized crime groups flooded state unemployment systems with bogus online claims, overwhelming antiquated computer software benefits in blunt-force attacks that siphoned out millions of dollars,” NBC News reported.

Prison inmates, drug gangs, and Nigerian racketeers easily plundered the program. One swindler collected unemployment benefits from 29 different states. In the first year of the pandemic, Maryland detected more than 1.3 million fraudulent unemployment claims — equal to 20% of the state’s population

Beginning in June 2020, the feds distributed $813 billion in Paycheck Protection Program loans to businesses. President Donald Trump’s Treasury Secretary Steven Mnuchin boasted that PPP is “supporting an estimated 50 million jobs.” But many of those jobs existed solely in the imagination of political appointees.

The Small Business Administration (SBA), which administered the program, effectively told people, “Apply and sign and tell us that you’re really entitled to the money,” according to Justice Department Inspector General Michael Horowitz. The SBA camouflaged its “don’t ask, don’t tell” loan standard by claiming to perform economic miracles. The SBA ludicrously boasted that PPP loans saved more jobs than the total number of employees in at least 15 industries.

Yet CBS News found that PPP loans had gone to more than a thousand “ghost businesses” in Markham, Illinois — indicative of a nationwide problem of deluging nonexistent companies with federal cash. The feds gave “loans to 342 people who said their name was ‘N/A,’” the New York Times reported.