The 'paycheck protection' scams

 John Sexton:

Back in December the Secret Service estimate as much as $100 billion worth of COVID relief funds from the Paycheck Protection Program had been stolen by fraudsters. Today NBC News has a story reflecting on the total scope of pandemic fraud. Turns out if you start handing out money with few safeguards, a lot of people will line up to take it.

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…

“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.”

How did it work? PPP was set up to allow businesses to take out loans backed by the government, but in light of the pandemic those loans didn’t have to be paid back so long as the money was spent on legitimate “business expenses” such as payroll. In short order the government gave out $800 billion. Fraudsters looking to grab some of that loot invented companies that didn’t exist or inflated the number of employees they had and skimmed money off the top.

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…

“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.”

Some of the fraudsters have been caught. Last July a Texas man was sentenced to 11 years for stealing $24 million from the program....

...

A Florida rapper named “Baby Blue” was sentenced to 20 months for a similar scam involving $24 million. He used some of the money to buy himself a Ferrari. Earlier this year three fraudsters in California were arrested in Montenegro for stealing $18 million.

...

So far, only about a 100 have been caught.  The FBI should be concentrating on these cases rather than going all out on Biden's daughter's diary that wound up in the hands' of Project Veritas. 

Comments

Post a Comment

Popular posts from this blog

Should Republicans go ahead and add Supreme Court Justices to head off Democrats

Washington Post: Some Democrats eye adding more justices to the Supreme Court to change its ideological bent The once-remote idea has gained the attention of liberals angered by the GOP push to remake the federal courts. Probably the easy way to defeat this court-packing scheme is for Trump to propose doing the same thing now.  It would lead to Democrat denunciations and claims that it would be wrong, thereby blowing up any attempt by them in the unfortunate event of Democrats winning a presidential election.
Read more

29 % of companies say they are unlikely to keep insurance after Obamacare

Conn Carroll: A new survey of 368 midsize to large companies found that 29% of them are considering terminating their active employee health care plans when Obamacare is full implemented in 2014. Only 71% of employers surveyed said they did not expect to drop their health coverage, while 20% said they did not know and 9% said they were planning to exit. The latest survey, conducted by Towers Watson, echoes an ealier survey by McKinsey & Co. finding that 30% of private-sector employers were planning to drop their employee health insurance coverage by 2014. When the Congressional Budget Office crunched Obamacare's spending numbers, they estimated that only 7% of employees currently covered by employer-sponsored plans would lose their plans. ... This means the cost of the health care fiasco will be hundreds of billions more than estimated by the CBO and Congressional Democrat. It is also clear that Obama's pledge that you could keep your health care plan if you wanted t
Read more

Bin Laden's concern about Zarqawi's remains

James Robbins: ... Bin Laden suggests that President Bush should allow Zarqawi’s body to be returned to his family in Jordan, but this is a matter that is up to the Jordanian government, which so far has not shown much interest in facilitating a homecoming. Bin Laden mocks King Abdullah II, calling him a Coalition minion, and asking “w hat scares you about Abu Musab after he’s dead? You know that his funeral, if allowed to happen, would be a huge funeral showing the extent of sympathy with the mujahedin.” A large crowd would definitely turn out, though most people would be on hand to demonstrate their anger and disgust. Last November’s hotel bombings in Amman , masterminded by Zarqawi, are still fresh in people’s memory, and mentioning them to Jordanians has the same visceral impact as memory of the 9/11 attacks does here. Jordan has adopted a zero-tolerance policy towards those who choose to mourn the country’s least favorite son, and four opposition members of parliament who paid con
Read more