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‘The Biggest Fraud in a Generation’: Hundreds of Billions in ‘Covid Relief Funds’ Have Gone Missing

    The United States government presided over what is being called the “biggest fraud in a generation” during the Covid pandemic.

    According to the latest reports on the Covid relief program, between $163 billion and $400 billion out of a total of $900 billion in funding has gone missing.

    The Department of Labor has admitted that at least $163 billion of the Covid relief funds did not make it into the right hands, Pete Hegseth reported.

    The $163 billion in “lost” funds includes fraud — and the estimate is on the “low end,” Hegseth added.

    According to a Fox News piece by former Congressman Erik Paulsen and Matt Weidinger of the American Enterprise Institute, the Republican-led House is now tasked with getting to the bottom of the Covid fraud.

    “The federal government’s response to the coronavirus pandemic unleashed unprecedented demand for unemployment benefits starting in March 2020,” the authors write. “Congress responded with record benefit expansions, including adding $600 per week to all unemployment checks. Claims for state and federal unemployment benefits quickly surged to 33 million in June 2020—more than double the prior record. In all, nearly 1.6 billion unemployment checks worth $900 billion were paid out through Labor Day 2021. An individual collecting just average unemployment benefits nationwide throughout that time received $46,000 in checks—plus thousands more in stimulus checks and other government benefits.”

    “Those huge payouts—and serious weaknesses in federal temporary benefit program design—attracted criminals intent on ripping off the system. The new federal Pandemic Unemployment Assistance (PUA) program was the most vulnerable to abuse,” they added. “It offered weekly checks to independent contractors, the self-employed, and others who worked too little to qualify for regular state Unemployment Insurance (UI) checks. In contrast with UI, PUA allowed claimants to self-certify their eligibility and initially did not even require proof of prior work or adequate identity verification. As the Department of Labor’s (DOL’s) Inspector General (IG) summarized, PUA was ‘extremely susceptible to improper payments and fraud’.”

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    The authors then explain why the true scale of the theft may be much higher — and may even include significant sums ‘likely’ stolen by criminal gangs in China and Russia.

    “How much was stolen?” they ask. “Official estimates—which admittedly understate real losses—are staggering. The DOL IG estimates $163 billion was lost, including to fraud. That is based on an estimated improper payment rate of 18.71 percent from July 2020 to June 2021. But that misses the massive spike in claims early in the pandemic, along with losses under the PUA program, which was most prone to abuse. Counting those factors, unofficial loss estimates range to as high as $400 billion, or an astonishing 40 percent of all benefits paid. Significant shares were likely stolen by overseas criminal gangs, including in China and Russia.”

    The Covid relief fraud has been a known issue for over a year; however, the Pelosi-led House of Representatives did nothing to solve the problem. It is now up to the GOP-led House to restore some sanity in Washington. Good luck.

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    OPINION: This article contains commentary which reflects the author's opinion.