Secret Service alleges massive theft of federal relief funds

On Behalf of | Jan 13, 2022 | Fraud

The U.S. Secret Service says it is investigating the theft of close to $100 billion from federal relief programs intended to aid people and businesses suffering economic losses during the pandemic.

The agency says it’s recovered more than $2 billion of the stolen funds and arrested over 100 people. The suspects include individuals and organized groups accused of stealing a significant chunk of relief money since early 2020.

Four pandemic relief programs targeted

Since the pandemic began, the government has paid nearly $3.5 trillion in COVID-19 relief funds. The Secret Service says the suspects primarily targeted these federal programs:

  • Pandemic Unemployment Assistance program
  • Paycheck Protection Program (PPP)
  • Coronavirus Aid, Relief, and Economic Security (CARES) Act
  • Economic Injury Disaster Loan program

Of the more than $2 billion recovered so far, $400 million were recouped with the aid of online payment companies PayPal and Green Dot.

Investigators say easy access to funds encouraged fraud

As the pandemic’s devastating economic consequences became evident in March 2020, the government sought to get relief out to citizens and small businesses quickly. The funds were readily accessible on the internet, and the Secret Service says that immensely helped bad actors.

The agency says suspects include organized criminal groups operating inside and outside the U.S. and individuals who were either desperate for money or decided to take advantage of the confusion and inadequate controls for allocating the funds.

New position announced to oversee investigations

The Secret Service, primarily known for its role protecting the president, also specializes in financial fraud. In late December, the agency announced the appointment of a national pandemic fraud recovery coordinator to oversee these investigations, which are expected to steadily rise from the nearly 1,000 current cases.