Fraudsters stole $100B in government funds, they’re about to get away with it

• The statute of limitations for COVID-19 relief crimes expires March 27. Thousands of cases are pending.
• The Government Accountability Office estimates fraudsters stole between $100 billion and $135 billion.
• The Department of Labor said only $5 billion has been recovered.

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Thousands of fraudsters who collectively stole more than $100 billion in COVID emergency unemployment assistance are about to get away with it. The statute of limitations for pandemic aid crimes expires March 27, unless Congress approves an extension.

Law enforcement agencies have thousands of pending cases. The Department of Justice alone has more than 1,600 criminal matters that remain open and uncharged.

What can Congress do to buy more time?

“I hope that in the coming weeks, we can work together in a bipartisan fashion to pass legislation to do just that and get a bill across the finish line before the March 27 date,” Rep. Darin LaHood, R-Ill., said.

Congress previously tried and failed to extend the statute of limitations by five years.

The Government Accountability Office estimates $100 to $135 billion was lost to fraud during the pandemic. Only $5 billion has been recovered, according to the Department of Labor.

How did fraudsters steal more than $100 billion?

Stealing from relief funds is relatively easy due to what one expert described as the government’s “pay and chase” method. Agencies work to distribute aid as quickly as possible, so they don’t properly verify identification and they miss red flags in a flood of claims. 

This makes government programs a target for criminals. 

“They never run out of money, and you likely won’t be arrested,” Haywood Talcove, CEO of LexisNexis Risk Solutions, explained. 

Talcove shared how criminal organizations use stolen personal information to file claims on behalf of real people. He said the government needs to implement stronger identity verification and end self certification, which allows recipients to confirm their own eligibility. 

“If we fail to act, we are complicit in funding fraudsters, organized criminals, nation states and even terrorists who use these programs as their personal checking accounts,” Talcove told Congress.

Who is behind the largest instances of fraud?

While there are individuals who steal for themselves, the bigger problem is organized crime on an international scale. The DOJ recently announced that a man pled guilty to laundering $59 million in public benefits to China. Some funds were traced to North Korea’s nuclear weapons program. Money has also gone to organized crime networks in Nigeria, Iran and Russia.

Talcove warned it’s not just COVID funds, it’s all disaster relief. So the same criminals who stole from the government during the pandemic are doing it again in California as the state recovers from devastating wildfires.