WASHINGTON–Criminals have stolen nearly $100 billion in pandemic relief funds, according to the U.S. Secret Service.
The stolen funds were diverted by fraudsters from the Small Business Administration's Paycheck Protection Program, the Economic Injury Disaster Loan program and another program set up to dole out unemployment assistance funds nationwide.
According to the Secret Service, more than $2.3 billion in stolen funds have been recovered so far, resulting in the arrest of more than 100 suspects who span the spectrum from individuals to organized groups.
The Secret Service, which specializes in financial fraud in addition to its better-known role in presidential protection, also announced the appointment of a new national pandemic fraud recovery coordinator to oversee its sprawling investigations into the enormous number of fraud cases resulting from all that theft, CNBC reported.
"I've been in law enforcement for over 29 years and worked some complex fraud investigations for 20 plus years, and I've never seen something at this scale," Assistant Special Agent in Charge Roy Dotson, who was named to the new role at the agency, told CNBC. "There's no doubt that the programs were easily accessible online. And so, with that, comes the opportunity for bad actors to get into that mix. It was necessary to try to get these funds out to people that were truly hurting, and no fault of anybody."
More Than 900 Investigations
The Secret Service currently has more than 900 active investigations related to pandemic fraud, Dotson said.
"It's a wide range because the pot was so big," continued Dotson, who is based in the Jacksonville field office. "You not only have your typical transnational organized groups and domestic organized groups, criminal groups, but you have individuals that decided to take advantage of that. So, there's many different patterns and investigative intelligence that we develop that I can't really go into. But we've mapped out kind of some of the different characteristics of different groups."
Among the recovered funds were hundreds of millions of dollars sent to Green Dot and PayPal, a Secret Service spokesperson told the news outlet.
$400M Seized
"After the Secret Service alerted the private sector early on about the emerging fraud, numerous financial institutions proactively identified, investigated, and safeguarded against suspected fraudulent pandemic relief funds," the spokesperson said. "These private institutions then reached out to the Secret Service for further assistance. In coordination with companies like Green Dot Corporation and PayPal, the Secret Service was able to seize over $400 million in fraudulent funds."
The report added that the fast rollout of the Pandemic Unemployment Assistance program made it easy prey for fraudsters. The Labor Department's Office of Inspector General, in a report released in March, said that at least $89 billion of the estimated $896 billion in unemployment program funds "could be paid improperly, with a significant portion attributable to fraud."