Donald Trump's Republicans wrote the COVID-19 relief package legislation and told Democrats to take them or else, so they did in order to help the economy. The reality is that the Trump COVID packages ended up being hundreds of billions for fraudsters across the board, fraud that the Republican party took advantage of time and time again. Now a new report finds that the total fraud among all the Trump COVID-19 bills could be more than a half-trillion dollars.
They bought Lamborghinis, Ferraris, and Bentleys.
And Teslas, of course. Lots of Teslas.
Many who participated in what prosecutors are calling the largest fraud in American history—the theft of hundreds of billions of dollars in taxpayer money intended to help those harmed by the pandemic — couldn’t resist purchasing luxury automobiles. Also mansions, private jet flights and swanky vacations.
They came into their riches by participating in what experts say is the theft of as much as $80 billion — or about 10 percent — of the $800 billion handed out in a Covid relief plan known as the Paycheck Protection Program. That’s on top of the $90 billion to $400 billion believed to have been stolen from the $900 billion Covid unemployment relief program — at least half taken by international fraudsters — as NBC News reported last year. And another $80 billion potentially pilfered from a separate Covid disaster relief program.
The prevalence of Covid relief fraud has been known for some time, but the enormous scope and its disturbing implications are only now becoming clear.
Even if the highest estimates are inflated, the total fraud on all Covid relief funds amounts to a mind-boggling sum of taxpayer money that could rival the $579 billion in federal funds included in President Joe Biden’s massive, 10-year infrastructure spending plan, according to prosecutors, government watchdogs and private experts who are trying to plug the leaks.
“Nothing like this has ever happened before,” said Matthew Schneider, a former U.S. attorney from Michigan now with Honigman LLP. “It is the biggest fraud in a generation.”
Most of the losses are considered unrecoverable, but there is still a chance to stanch the bleeding, because federal officials say $600 billion is still waiting to go out the door. The Biden administration imposed new verification rules in 2021 that administration officials say appear to have made a difference in curbing fraud. But they acknowledge that programs in 2020 sacrificed security for speed, needlessly.
Department of Justice Inspector General Michael Horowitz, who oversees Covid relief spending, told "NBC Nightly News" anchor Lester Holt in an exclusive interview that Covid relief programs were structured in ways that made them ripe for plunder.
“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,’” said Horowitz, who chairs the Pandemic Response Accountability Committee. “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.”
The criminal methodology varied, depending on the program. The epic swindle of Covid unemployment relief has been carried out by individual criminals or organized crime groups using stolen identities to claim jobless benefits from state workforce agencies disbursing federal funds. Each identity could be worth up to $30,000 in benefits, according to Horowitz.
The looting of the Paycheck Protection Program worked differently — and could be far more lucrative. That program authorized banks and other financial institutions to make government-backed loans to businesses — loans that were to be forgiven if the companies spent the money on business expenses. Nearly 10 million of these loans have already been forgiven. Many of these loans-turned-grants were for millions of dollars, public records show.
Experts say millions of borrowers inflated the number of employees or created companies out of whole cloth. For much of 2020, lenders did little to verify the applications, prosecutors and experts say, in part because Congress required the U.S. Small Business Administration (SBA), which ran the program, to issue explicit guidance that in the interest of getting the money out fast, lenders “will be held harmless for borrowers’ failure to comply with program criteria.” The Government Accountability Office warned of fraud risk, but the program continued under that rule.
“The government spent approximately $800 billion and provided 21 million loans to individuals,” said Haywood Talcove, CEO of Lexis Nexis, which works with the government to verify identities.
No one is sure exactly how much was stolen. An academic paper released last year estimated at least $76 billion in potential fraud, and the authors said that was conservative.
The SBA’s Inspector General has identified $78.1 billion in potentially fraudulent Economic Injury Disaster Loans, another Covid relief program for businesses. The Secret Service has its own estimate: $100 billion.
The basic scheme, Talcove said, was “really simple.” People went on state websites and took the names of existing businesses or registered new, fake ones.
“There's absolutely no security on there. There's no validation of any information,” Talcove said. “And voila, you have company ABC with 40 employees and a payroll of $10 million. And you go and apply for a PPP loan. It was a piece of cake.”
And just like that, thousands of fake companies looted billions of dollars. Rich Republican lawmakers made sure that their businesses got huge cash payout, the loans free of charge. It was a pinata stuffed with billions, and everyone got a piece.
You and me, well, we all got screwed, didn't we?
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