The Secret Service has identified and thwarted approximately $1 billion worth of fraudulent claims seeking federal aid amid the coronavirus pandemic, a senior government official told lawmakers.
Michael D’Ambrosio, assistant director of the Secret Service’s Office of Investigations, testified before the Senate Judiciary Committee Tuesday that the agency has initiated more than 100 criminal investigations since the implementation of federal and state government aid programs were rolled out in March. People trying to defraud the government attempted to take roughly $1 billion of $3 trillion made available for U.S. citizens and businesses amid the economic recession brought on by nationwide closures.
No federal program went untouched, according to D’Ambrosio, who appeared at a hearing on law enforcement’s response to those exploiting the pandemic. The massive number of fraudulent claims were made for unemployment benefits, Economic Impact Payments, the Paycheck Protection Program, and the CARES Act initiatives.
“These criminals aren’t just defrauding these programs directly but also impeding the execution of these programs, thus denying essential aid to intended recipients in dire need of assistance,” D’Ambrosio wrote in his opening statement.
FBI Assistant Director Calvin A. Shivers provided senators with data showing that as of May 28, the Internet Crime Complaint Center had received 320,000 complaints, which was 75% of the number received in all of 2019.
Shivers said, to describe an example of fraud, how the FBI has been contacted by business owners who were unable to apply for a Paycheck Protection Program but were told their Employer Identification Number had already been used on this type of application. In total, justice officials and the Small Business Administration’s inspector general have detected $42 million in potentially fraudulent applications.
“The fraud related to the CARES Act is perhaps the most troubling development thus far,” D’Ambrosio wrote. “Congress has appropriated nearly $3 trillion to support the American economy, the largest-ever economic stimulus package in U.S. history. Even if we assume a very low rate of fraud, of just 1%, we should still expect more than $30 billion will end up in the hands of criminals.”
