The Secret Service said Friday that it has recovered $286 million in Covid relief funds that were meant for small businesses but were siphoned off by fraudsters using thousands of stolen or fake identities.
The conspirators used fake identities to apply for Covid relief funds known as Economic Injury Disaster Loans (EIDL), and created 15,000 accounts at Green Dot Bank, an online institution in Texas, to try to access the money using debit cards. Green Dot notified the Secret Service when it discovered suspicious accounts, and the EIDL money was returned to the Small Business Administration, which had administered the relief funds.
Assistant Special Agent in Charge Roy Dotson, the lead pandemic fraud investigator for the Secret Service, said at a news conference Friday that there are “many actors” and a “myriad of potential suspects behind the fraud,” and believes there could be domestic and international co-conspirators.
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“Investigations are ongoing,” said Dotson, who added that pandemic fraud is “one of the largest financial crime investigations we’ve ever undertaken.”
As federal and state governments raced to get money out the door to keep the economy afloat, many safeguards were overlooked. Estimates of the total amount of fraudulently obtained federal, state and local Covid relief money start at about $100 billion and top $500 billion. Experts say will likely take years to account for the full scope of the fraud.
In March, NBC News reported that as much as $80 billion might have been stolen from the EIDL program, on top of another $80 billion — or about 10 percent — of the $800 billion handed out in a Covid relief plan known as the Paycheck Protection Program, or PPP. Fraudsters may have taken as much $400 billion from the $900 billion Covid unemployment relief program, NBC News reported last year.
The vast majority of the funds is unlikely to ever be recovered, as they were stolen by overseas actors, investigators say.
The Secret Service and the SBA’s Office of Inspector General have seized more than $1 billion stolen through the EIDL program, according to the Secret Service.
The Secret Service, in addition to protecting the U.S. president and other high-profile elected officials, is responsible for investigating counterfeit money and financial fraud.
The investigation of the Green Dot accounts was initiated by the Secret Service’s Orlando, Florida, field office. According to Dotson, the Secret Service was contacted by the bank in the summer of 2020 about suspected fraud and the seizures were executed in October 2020.
Green Dot did not immediately respond to a request for comment.