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US pandemic-aid fraud put at $45.6b

By AI HEPING in New York | China Daily Global | Updated: 2022-09-23 10:51

Criminals may have stolen $45.6 billion from the nation's unemployment insurance program during the COVID-19 pandemic, according to a federal report issued Thursday.

The Labor Department's inspector general said the fraud was carried out by using the Social Security numbers of more than 205,000 dead people; using identities of federal prisoners who are ineligible for aid; and other tactics. Scammers filed billions of dollars in unemployment claims in multiple states simultaneously.

Earlier this week, federal prosecutors charged 47 defendants in an entirely different scheme targeting a program to provide free meals for needy children. The organization, Feeding Our Future, allegedly stole more than $250 million from the meal program in what the Justice Department described as the largest, single fraud case targeting coronavirus aid to date.

A year ago, potential fraud from a vast array of federal relief programs was put at $16 billion.

Kevin Chambers, the director for coronavirus-related enforcement for the Justice Department, described the situation in a statement as "unprecedented fraud".

The country's jobless aid program began under the Trump administration in 2020. The weekly benefits helped more than 57 million families just in the first five months of the crisis.

The inspector general's office said it had opened roughly 190,000 investigative matters related to unemployment insurance fraud since the start of the pandemic. The government also announced it had charged 1,000 individuals with crimes involving jobless benefits during the pandemic.

Officials at the watchdog office said they couldn't access more updated federal prisoner data and only focused their report on "high risk" areas, raising the prospect that they could uncover billions in additional theft in the months to come.

At a congressional hearing this spring, the inspector general estimated there could have been "at least" $163 billion in unemployment-related "overpayments", a projection that included wrongly paid sums as well as "significant" benefits obtained by criminals.

The US has recaptured just more than $4 billion of that, the Labor Department said in March — roughly 2.4 percent of the wrongful payments.

In the earliest days of the pandemic, when roughly a million Americans were out of work daily, Congress approved massive rescue packages totaling nearly $900 billion, according to the Labor Department.

But criminals found ways to exploit the nation's under-resourced state unemployment agencies. They employed tools known as botnets to fire off thousands of applications, federal officials said, often with a single computer click.

They openly swapped tips for defrauding the government on popular websites and apps, including the messaging service Telegram, the officials said.

Agencies contributed to this story.

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