According to a letter exclusively obtained by NBC News, a congressional committee investigating fraud in pandemic relief has demanded that the Justice Department produce documents and information describing how international criminal groups plunder these programs.
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 was sent a week following the Labor Department’s new estimation that estimated the amount of fraud in the pandemic program between March 2020 and September 2021 to be nearly 40%. Estimated losses or questionable payment amounts of $47.3 billion out of a $131.6 billion total were also included. According to the report, the program’s design flaws and lack of verification systems created a “perfect hurricane” which allowed criminals to steal massive amounts of benefits by using false identities.
The inspector general of the Small Business Administration stated in June that up to $200 billion was stolen from the programs administered by this agency. This does not include unemployment benefits.
The Select Committee, when estimating the fraud total in all pandemic aid programs, cited a $280 billion figure, which was based on a June report from The Associated Press, headlined “The Great Grift”: How billions of dollars in COVID-19 assistance were stolen or wasted.
The letter cites NBC News reports, part of the Fleecing of America Series, which document fraud in the Unemployment Relief Program as well as in separate Loan Programs that are designed to assist businesses in paying workers. NBC News reported on the theft of tens billions by Russian mobsters and Chinese hackers, as well as Nigerian scammers, from Covid benefits. The money was then sent overseas, a massive transfer in wealth for U.S. tax payers.
The Biden administration has set aside $1.6 billion for the recovery of stolen relief funds and prosecutions. These cases have been given priority by the Justice Department. The DOJ does not have the resources necessary to prosecute everyone who has stolen taxpayer money. Justice Department officials claim that Congress has not provided additional funding to expand Covid Fraud Task Forces, as promised by President Joe Biden in his State of the Union Address 2022.
The Justice Department released results earlier this month of “a coordinated nationwide enforcement action against COVID-19 Fraud, which included federal criminal charges filed against 371 defendants for offenses relating to over $836,000,000 in alleged COVID-19 Fraud” — just a fraction of the total amount of money stolen.
Lisa Monaco, Deputy Attorney-General at a press conference, said: “Our work is not done.” “We will continue prosecuting those who committed pandemic aid fraud, both at home and abroad. We will continue to use our forfeiture and recovery tools aggressively in all cases to recover stolen money.
She said that since the start of the pandemic the DOJ brought criminal charges against almost 3,200 defendants, with alleged losses totaling nearly $1.7 billion. It also seized approximately $1.4 billion of stolen relief funds. This is only a small percentage of all fraudsters, and a fraction of the total amount of money stolen.
DOJ officials admit that it is difficult to prosecute overseas criminals that stole Covid funds. Experts say that there are few chances that the government can catch these perpetrators, or even recover any of the money. Justice Department officials have not disclosed a public estimate of the amount stolen by international groups. They only said it was a significant amount. FBI Assistant Director Jay Greenberg said to NBC News that a “significant” amount of money was sent overseas. He called it an “economic attack on the United States.”
Experts and officials say that the worst fraud happened during the Trump Administration, when the pandemic began. This was due to poorly designed relief programs with rules written by both Republican and Democratic members of Congress. The debacle hasn’t been branded a Washington scandal, in part because both Republicans and Democrats were involved.
Rep. Brad Wenstrup (the Ohio Republican who chairs this select committee) stated in the letter that they want to “better grasp the scope of the problem and the actions taken by the Department to investigate the international COVID-19 program fraud and hold foreign actors accountable.”