Fraud expert: Half of all U.S. Covid relief funds likely went to nations like China and Russia

by WorldTribune Staff, October 23, 2023

A combination of “inadequate oversight and internal controls,” and “antiquated data and information systems” created a “perfect storm for fraud” in the distribution of Covid relief funds, a fraud prevention expert said in congressional testimony last week.

Linda Miller told the House Ways and Means Oversight Subcommittee hearing on pandemic fraud on Oct. 19 that half of all the Covid relief funds distributed by the U.S. likely wound up in the hands of adversarial nations such as China and Russia.

The U.S. Government Accountability Office estimates that instances of fraud in the pandemic unemployment insurance program alone have cost U.S. taxpayers as much as $135 billion while outside experts have estimated up to $400 billion worth of improper payments.

“Data on this is still being evaluated, but there are some estimates that half of the pandemic unemployment assistance fraud went to adversarial nations,” Miller told the committee. “The nearly $5 trillion in government relief spending during the Covid-19 pandemic, much of which was disbursed as direct payments to citizens, created the perfect storm for fraud.”

Government agencies “were unprepared for the fraud they encountered largely due to a lack of attention on fraud risks,” Miller said.

During the hearing, Arizona Republican Rep. David Schweikert noted: “We’ve been tracking some crazy stories of [unemployment insurance] UI fraud that was converted to gift cards, that got moved into buying cars, and then the cars were shipped to North Africa, as a way to wash the money. Let’s say we had your data exchange, where do I break the fraud loop?”

Miller responded: “The data is the way to address this significant problem, which is identity theft. We saw unprecedented identity theft, because of the vast number of data breaches that we’ve experienced. Every single American’s information is available for sale on the dark web today. You can buy Social Security numbers for about 25 cents apiece now. They’ve gone down. They were about $1 apiece about a year ago. … Most of these tools to effectively use stolen identities can be circumvented, especially in the age of generative AI. So now they’ve even got much more sophisticated tools than we did at the beginning of the pandemic that they’re using and exploiting right now. And so as a result we’ve got a dynamic adversary, and we have very, very static processes that address them.”

Pennsylvania Republican Rep. Brian Fitzpatrick noted: “American officials have blamed Chinese hackers for the breaches of OPM [U.S. Office of Personnel Management], Anthem Health, and Equifax. It’s clear that Covid fraud is not just a domestic issue. This is a matter of national security. So based on your experience working with the Pandemic Response Accountability Committee, what are the national security implications in your view of foreign, state-affiliated hackers stealing taxpayer funds that were intended for Covid relief benefit programs?”

Miller responded: “There’s some estimates that half of the pandemic unemployment assistance fraud went to adversarial nations. And that’s pretty problematic, when you consider that people when they think about fraud, they think, ‘Oh, it’s just a little rounding error.’ This was fraud that’s funding our adversaries. That’s what happened during the pandemic and that’s why there’s so much attention on it, which is valid.”

The committee also heard testimony on how U.S. criminal organizations scammed the Covid relief funding system.

Amy Simon, an unemployment insurance expert, told the committee: “Pandemic fraud is effectively a vertical for many criminal organizations, and it is an income source. There was a recent DOJ indictment in Michigan, that was a sprawling scheme that was funded by multiple kinds of pandemic fraud, including unemployment insurance, that had murder for hire as one of its services. These are not run-of-the-mill, someone down the street claimed a few extra weeks that they shouldn’t have claimed.’ This is serious street crime.”

Holding hearings on such matters seems to be the in thing these days, but taking action and stopping such things as Covid relief fraud is another story.

Revolver News noted: “The scale of corruption, waste, fraud, incompetence, and abuse that the American people are putting up with from this corrupt regime is off the charts. The question now is: how much longer can the United States endure this abuse? We’re a nation on the decline, and it’s astounding that everyone, including the GOP, is sitting idly by, watching it all crumble, and hardly raising a word of objection.”

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