Risk & Compliance

Thieves Nab $100M in Pandemic Relief Funds

The Secret Service says funds from CARES Act programs including the PPP were stolen by individuals and organized criminal networks worldwide.
Matthew HellerDecember 22, 2021

Fraudsters have stolen nearly $100 million from pandemic relief programs for businesses and the unemployed, according to the Secret Service.

The amount of stolen funds represents roughly 3% of the $3.4 trillion dispersed under the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program, and the Pandemic Unemployment Assistance program.

“There’s no doubt that the programs were easily accessible online. And so, with that, comes the opportunity for bad actors to get into that mix,” Roy Dotson, the national pandemic fraud recovery coordinator for the Secret Service, told CNBC.

“It was necessary to try to get these funds out to people that were truly hurting, and no fault of anybody,” he added.

The Secret Service said it has seized more than $1.2 billion while investigating unemployment insurance and loan fraud and has returned more than $2.3 billion of fraudulently obtained funds by working with financial institutions and states to reverse transactions.

The agency has more than 900 active criminal investigations into pandemic fraud, with cases in every state, and 100 people have been arrested so far.

“It’s a wide range because the pot was so big,” Dotson said. “You not only have your typical transnational organized groups and domestic organized groups, criminal groups, but you have individuals that decided to take advantage of that.”

The Justice Department said last week that its fraud section had prosecuted more than 150 defendants in more than 95 criminal cases and had seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with the proceeds.

“The release of federal funding through the Coronavirus Aid, Relief and Economic Security (CARES) Act has attracted the attention of individuals and organized criminal networks worldwide,” the Secret Service said. “The exploitation of pandemic-related relief is an investigative priority for the Secret Service and its partners.”

Among the recovered funds were more than $400 million sent to Green Dot and PayPal.