‘Nothing like this has ever happened before’: Fraudsters made bank pilfering COVID relief money

It was practically inevitable.

In a story that should come as a surprise to absolutely no one, NBC News has discovered that the Paycheck Protection Program (PPP) is riddled with truly staggering amounts of fraud.

The PPP was established in 2020 as part of the emergency CARES Act and was designed as a business loan program to help employers and organizations continue to pay their workers during the initial months of the COVID-19 crisis.

Around $800 billion in funds were disbursed through the program, and now it appears that roughly 10% of that—$80 billion—was stolen in what may be one of the largest cases of fraud in U.S. history, according to NBC News.

Of course, that would be a drop in the bucket compared to the estimate of $400 billion in pilfered money from other pandemic-related unemployment relief measures—at least half of which was stolen by foreign actors, including the ubiquitous Nigerian scammers and Russian mobsters. And that’s to say nothing of another $80 billion stolen from the Small Business Administration’s pandemic loan programs.

So what was all that stolen money spent on? You know, the usual—Teslas, Ferraris, Bentleys, Lamborghinis, diamonds, gold coins, palatial mansions, private flights, luxury hotels, and even a bender or two at a casino.

Nothing like this has ever happened before,” Matthew Schneider, a former U.S. attorney from Michigan, explained in the NBC News report. “It is the biggest fraud in a generation.” 

The looted money, unfortunately, is not likely to be recovered anytime soon. Last year, new verification measures were enacted to (hopefully) prevent similar fraud in the future, with $600 billion still waiting to be spent in relief programs. As for how the theft was allowed to happen in the first place, the answer is quite simple: almost no protective measures were put in place to prevent it.

In an interview with NBC Nightly News anchor Lester Holt, DOJ Inspector General Michael Horowitz explained the problem: “The Small Business Administration, in sending that money out, basically said to people, ‘Apply and sign and tell us that you’re really entitled to the money.’ And, of course, for fraudsters, that’s an invitation…What didn’t happen was even minimal checks to make sure that the money was getting to the right people at the right time.” 

There were few obstacles to hamper the thieves. For the unemployment relief programs, the fraudsters simply used stolen identities to claim jobless benefits that could amount to $30,000 per identity. For the Paycheck Protection Program, fraudulent borrowers often exaggerated the number of employees to get a little more money, and some even created non-existent companies to win funds they weren’t entitled to. For instance, a man and woman in Miami are accused of filching over $1 million from the program by claiming they were operating large farms out of small single-family homes in the middle of the city.

Probably the most outrageous story to come from the whole mess is that of Danielle Miller, who’s alleged to have purloined $100,000 in loans from the program. She immediately put the money to good use, however, chartering a private flight from Florida to California, and lavishing $5,500 on a stay at a luxury hotel in West Hollywood, according to court documents filed in Boston.

“Honestly, I more so consider myself a con artist than anything,” Miller said in a recent, pre-indictment profile in New York magazine. “You know how they have that saying that you can sell ice to an Eskimo? If there’s something that I want, I’m getting it.”

She’s getting it all right—house arrest and an ankle monitor, with the prospect of an all-expenses-paid trip to the hoosegow.

In the meantime, the Feds are still trying to get a handle on just how much money has been stolen. The amount of $78 billion seems to be a low estimate, with Secret Service numbers suggesting as much as $100 billion. Either way, the scope and extent of the fraud is astonishing and seems to constitute yet another example of the federal government’s negligence and carelessness with taxpayer money.


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Todd Jaquith


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