The Secret Service announced Friday that it had helped to recover nearly $2.3B in false pandemic benefits and returned the money to government. This included a new major operation which netted almost $300million in small-business loans.
Agents from the Secret Service in Orlando, Florida noticed that money-launderers were moving their funds around using Green Dot Bank as a payment method. Working with the bank, the service said it identified more than 15,000 accounts that were being used to funnel money stolen by fraud.
Agents took $286 millions from these accounts and then returned it to the Small Business Administration.
The government provided loans for Paycheck Protection Programs totaling approximately $835 trillion and another $500 million to Economic Injury Disaster Loans. These were intended to help small businesses survive a pandemic.
Unemployment benefits were increased by another $718 million.
All of these programs were plagued with serious fraud.
Though the government is still trying to come up with a good estimate for how much money was actually stolen, early conservative estimates for the PPP put the fraud figure at about 10%. Although $400 trillion is the most likely estimate for fraud in unemployment, analysts believe that $200billion would be more reasonable.
Little was recovered.
The $2.3 billion that the Secret Service claims it has retaken would amount to about 3% total PPP fraud.
Convictions and prosecutions are starting to mount, but only a fraction of total fraud.
One common thread in the prosecutions is conspicuous consumption by those who steal from taxpayers. The thieves bought luxury vehicles and properties, or paid for plastic surgery and shopping sprees.
The government often moves to seize property or vehicles they can track back to pandemic-related fraud. However, much of this money was sent abroad making it almost impossible to recover.
A 39-year-old immigrant from Pakistan pleaded guilty in California this month to collecting more than $6.6 million in bogus PPP loans. Authorities said he filed 11 fraudulent EIDL and PPP applications for seven shell companies, lying about his employees and what he wanted to use the money for.
Investigators claim that Muhammad Noor Ul Ain Atta filed some of the loan applications under a stolen identification, using the name and address of someone who was in Illinois jails or prisons since 2008.
Authorities claimed that Atta wired $6 million to Pakistan. They said the money was meant for family support .”
