Full Extent of COVID Fraud Will ‘Never Be Known With Certainty’: A new GAO report details federal prosecutors’ attempts to put the horse back in the barn; Audit Reveals Mishandling of Honolulu’s COVID-19 CARES Act Spending, and other C-Virus related stories

By admin On Nov 18, 2023

Full Extent of COVID Fraud Will ‘Never Be Known With Certainty’

A new GAO report details federal prosecutors’ attempts to put the horse back in the barn.

A couple claiming to run a farm that employed dozens of people used fake employee records to get more than $1 million in COVID-19 relief payments when they actually employed no one on a farm that did not exist.

A social media influencer created fake documents to score more than $400,000 in COVID-19 funds meant to help small businesses, then used the money to buy cryptocurrency and gifts for his girlfriend.

A state employee whose job was to stop unemployment benefits fraud helped other fraudsters navigate around fraud prevention systems so they could steal more than $1 million, including federal tax dollars made available to states during the pandemic.

Only now, nearly four years after the federal government approved an unprecedented amount of emergency spending in response to the COVID-19 pandemic, are investigators getting a full picture of all the ways that schemers and thieves raided programs. Congress approved about $4.6 trillion in COVID-19 emergency spending, and so much of it was stolen that auditors now say we’ll likely never have a full accounting of it all.

“When the federal government provides emergency assistance, the risk of payment errors—including those attributable to fraud—may increase because the need to provide this assistance quickly can lead agencies to relax or forego effective safeguards,” the Government Accountability Office (GAO) explained in a new report summing up efforts to recoup stolen funds. “Because not all fraud will be identified, investigated, and adjudicated through judicial or other systems, the full extent of fraud associated with the COVID-19 relief funds will never be known with certainty.”

As Reason has previously reported, auditors believe that about $200 billion was fraudulently disbursed from two programs run by the Small Business Administration (SBA) during the pandemic. That’s about one-sixth of all spending run through the SBA’s Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. Additionally, the GAO believes that between $100 billion and $135 billion in federal unemployment funds—provided to states on a temporary basis during the pandemic—were lost to fraud. —>READ MORE HERE

Audit reveals mishandling of Honolulu’s COVID-19 CARES Act spending”

When the Coronavirus Aid, Relief and Economic Security — or CARES — Act was signed into law in March 2020, the City and County of Honolulu received $387 million in federal assistance funds.

Then-Honolulu Mayor Kirk Caldwell established the Small Business Relief and Recovery Fund — or SBRRF — to help businesses survive and the Household Hardship Relief Fund — or HHRF — to help residents with their household expenses.

In the aftermath of the pandemic, a survey was conducted and it showed that 42% of all respondents disagreed or strongly disagreed with the city’s COVID response, which prompted an audit of Honolulu’s CARES Act spending.

While this happened during the Caldwell Administration, current Honolulu Mayor Rick Blangiardi says what his predecessor faced was a crisis like no other.

“To the credit of the prior administration, we were in the middle of a global pandemic, these monies that were flowing to the city from the federal government from the treasury, were unprecedented,” said Blangiardi, “and quite honestly, those rules were actually changing periodically and I think quite honestly, people weren’t really quite sure what they could and couldn’t do.”

Furthermore, the audit reveals that 98% of SBRRF recipients who applied for assistance failed to provide required documentation, and the city failed to follow federal guidance related to self-certification of businesses needing assistance.

“It’s hard to second guess anybody because we weren’t at the table making those decisions,” Mayor Blangiardi said. “When we came into office on January 2, 2021, a lot of businesses were hurting, and we seemed to be in a freefall at the time.”