White House Targets Pandemic Relief Fraud

March 2, 2023

The Biden Administration on Thursday requested Congressional approval of more than $1.6 billion to target “a historic degree of outright fraud” within Covid pandemic relief programs. 

A White House fact sheet on the topic blamed fraud and identity theft on “[p]ast underinvestment in basic government technology and the crush of demand during the pandemic, combined with ill-considered decisions to take down basic fraud controls at the onset of the pandemic.”

The White House goes on to say that while initial 2020 relief legislation (the CARES Act), along with the America Rescue Plan of 2021 were “essential” to mitigate the economic strain caused by the pandemic, “there must be a bipartisan response to punish those who engaged in major and systemic fraud against the American people during a time of national emergency” and to put stronger safeguards in place.

The White House laid out its budget for attacking fraud, including $600 million to ensure the time and resources for fraud investigations, another $600 million for identity theft investigations, and an additional $400 million to help the victims of identity theft.

“We must empower law enforcement to pursue, investigate, prosecute, and recover money from those who were engaged in major or sophisticated fraud—from well-off individuals who took hundreds of thousands, if not millions, of dollars from taxpayers to sophisticated criminal syndicates engaging in systemic identity theft,” the White House said.

In the same fact sheet, the Administration calls on Congress to pass “bipartisan legislation supported by the Oversight Community” to increase the claims cap in the Fraud Civil Remedies Act from $150,000 to $1 million.

The Republican-led House Committee on Oversight and Accountability Committee has opened an investigation into fraud in pandemic-relief programs; it held its first hearing on the subject early last month.

While the full extent of fraud is not yet known, from March 2020 to last January, at least 1,044 people pleaded guilty or were convicted of defrauding pandemic relief programs, according to the Government Accountability Office (GAO). Federal charges were pending against another 609 individuals or entities for attempting to defraud Covid-relief programs.

Further, the GAO estimates that the Unemployment Insurance program made more than $60 billion in fraudulent payments. And the Pandemic Response Accountability Committee reported that another $5.4 billion in Covid aid from the Small Business Association went to some 70,000 “questionable” social security numbers. 

On a call with reporters, White House American Rescue Plan coordinator Gene Sperling stated, “It’s just so clear and the evidence is so strong that a dollar smartly spent here will return to the taxpayers, or save, at least $10.”

He added that the Administration’s request would be part of a budget proposal President Biden is scheduled to make on March 9. However, the bulk of the anti-fraud fund would be separate from the White House’s one-year appropriation request. 

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