COVID-19-related government benefit programs relied on the honor system to combat abuse, resulting in massive fraud and costing the government as much as $100 billion, sources told The New York Times.
The federal government distributed $5 trillion in pandemic aid through three pieces of legislation and relied on heavily on applicants’ honesty when applying for benefits, according to the NYT. The aid programs were widely abused by individuals who gave the government fake names, listed fake businesses and provided other false information while applying for grants and other COVID-19 benefits.
Unemployment claims and loan applications were rife with fraud, and efforts by the Labor Department and the Small Business Administration to screen applications let obvious cases of fraud slip through the cracks, according to the NYT. One person collected unemployment from 29 different states; one person received 10 loans for 10 different non-existent bathroom renovation businesses using the email address of a burrito restaurant; one Postal Service employee received an $82,900 loan for a business called “U.S. Postal Services.”
It remains unclear exactly how much money was stolen from the government through fraudulent use of COVID-19 aid programs, but it’s likely at least in the tens of billions of dollars, Michael Horowitz, chairman of the Pandemic Response Accountability Committee, told the NYT.