Secret Service Seizes Billions in Fraudulent Covid Relief Payments

Secret Service Seizes Billions in Fraudulent Covid Relief Payments


The Secret Service has helped recover about $2 billion in fraudulent unemployment payments connected to Covid relief efforts, the agency announced Wednesday, and the funds are being returned to state unemployment offices.

“The amount of unemployment insurance benefits provided in response to the COVID-19 pandemic is unprecedented in the history of the nation’s unemployment insurance system,” Larry D. Turner, Acting Inspector General at the Department of Labor, said in a statement. “Unfortunately, the significant increase in benefits made the program a target for those seeking to defraud government programs.”

Saying that the $2 billion figure is a “conservative estimate” and that investigations are ongoing, Roy Dotson, Secret Service assistant special agent in charge, told CNBC that the crimes were typical of the kind of cyberfraud the agency deals with every year, though at a larger scale. Most of the fraudulent unemployment payments involved identity theft, Dotson said.

The agency also said it has initiated hundreds of investigations into potential fraud in several Covid relief programs and has seized $640 billion in funds dispersed through Economic Injury Disaster Loans and the Paycheck Protection Program.

The bottom line: The sheer size of the Covid relief programs, along with the unprecedented speed at which they were rolled out, made a fat target for fraudsters. A report from the Labor Department’s Inspector General in March said the programs have involved fraud worth tens of billions of dollars. Of the roughly $896 billion in unemployment program funds dispersed at that time, at least $89 billion “could be paid improperly, with a significant portion attributable to fraud.”