The U.S. Secret Service recovered $286 million in fraudulently obtained pandemic loans and returned the money to the Small Business Administration.
The Secret Service, the Small Business Administration’s inspector general, the DOJ, and other offices have been working together to prevent pandemic relief program fraud since 2020. They have seized over $1.4 billion in fraudulently obtained funds and helped to return $2.3 billion to state unemployment insurance programs.
The Secret Service said an investigation initiated by its Orlando office found that alleged conspirators submitted Economic Injury Disaster Loan applications by using fake or stolen employment and personal information and used an online bank, Green Dot, to conceal and move their criminal proceeds.
The agency worked with Green Dot to identify roughly 15,000 accounts and seize $286 million connected to the accounts.
“This forfeiture effort and those to come are a direct and necessary response to the unprecedented size and scope of pandemic relief fraud,” said Kevin Chambers, director for COVID-19 fraud enforcement at the Justice Department.
In March, the Government Accountability Office reported that while agencies could distribute COVID-19 relief funds quickly, “the tradeoff was that they did not have systems in place to prevent and identify payment errors and fraud” due in part to “financial management weaknesses.”
As a result, the GAO has recommended several measures for agencies to prevent pandemic program fraud in the future, including better reporting on their fraud risk management efforts.
For more on this story, please consider these sources: