The White House on Thursday laid out its plan to target pandemic fraudsters and recapture stolen relief funds distributed under both the Trump and Biden administrations.
A top White House official said the goal was to provide $600 million to investigate and prosecute systemic pandemic fraud, a similar amount to bolster fraud prevention and $400 million to help victims of identity theft.
“The president wanted to make sure that we had a special and concerted effort to prosecute and punish the worst offenders of pandemic fraud,” Gene Sperling, who is overseeing implementation of the White House’s American Rescue Plan, said on a call with reporters previewing the proposal.
While at least $2 billion has been recovered so far, according to Government Accountability Office data, some experts have estimated that Covid relief fraud could be more than a quarter of a trillion dollars. The Trump and Biden administrations distributed about $5 trillion in Covid relief funds.
Sperling said he will be on Capitol Hill talking with key lawmakers Thursday about the proposal, adding that it will part of the president’s budget, which is expected to be sent to Congress next week amid heightened tensions with Republicans over the debt limit.
Sperling, however, struck an optimistic tone about winning over Republicans to secure bipartisan support for the proposal.
“I think that they will see this as actual savings,” Sperling told reporters. “This is about increasing our [inspector generals’] and law enforcement’s ability to save taxpayer money.”
He also said he believes the proposal will end up paying for itself with the recovered funds.
House Oversight and Accountability Committee Chair James Comer, R-Ky., has said his panel will launch investigations into hundreds of billions of taxpayer dollars lost to fraud when Covid relief funds were distributed.
In response to the White House proposal, Comer said, “It’s about time the Biden Administration addressed waste, fraud, and abuse in pandemic spending. It took Republicans taking the majority and holding hearings prioritizing this issue for the Biden Administration to finally come up with a proposal.”
Comer, whose office would not say whether he had decided to support the administration’s proposal, said his panel will hold a hearing next week “on fraud and improper payments in COVID-relief programs administered by the Department of Labor, Treasury, and Small Business Administration.”
The White House also called for increasing the statute of limitations to 10 years for cases of serious, systemic pandemic fraud.
In an outline of its proposal, the White House said: “Absent additional resources, the oversight community would be unable to investigate and prosecute the known caseload before the statute of limitations expires and to pursue sophisticated cases that will require more time and resources.”
Sperling said: “It takes time to go after the most sophisticated folks. We want to not only capture them, get their funds. We want to send the signal to them that you can run but you cannot hide.”
According to the proposal, watchdogs for the Small Business Administration and the Labor Department would each get at least $100 million for long-term hiring of investigators to pursue organized pandemic fraud cases and to support efforts led by the Justice Department’s chief pandemic fraud prosecutor.
Haywood Talcove, chief executive officer for government at LexisNexis Risk Solutions, which contracts with states and the federal government on pandemic fraud prevention, said he is “very excited” about the White House’s proposal.
“Focusing on data-sharing between agencies and states while enhancing front-end identity protection will improve the experience of those using government services while reducing the amount of time law enforcement spends investigating these crimes,” Talcove said in a statement to NBC News.
Blake Hall, the CEO of ID.me, which also works with states and the federal government on pandemic fraud prevention and identity verification, called the White House’s proposal a “major step forward” in addressing a “national security issue.”
“We are glad to see major investments into fraud and investigations activity so criminals will be held accountable,” Hall said in a statement to NBC News. “Given the involvement of nation-state sponsored actors attacking benefits programs, pandemic fraud is a national security issue. We believe the answer to that pandemic era fraud is apparent.”
Since the pandemic began, 1,044 people have pleaded guilty or been convicted of defrauding federal Covid relief programs, according to the Government Accountability Office. An additional 609 have been charged.