Covid scammers may have stolen as much as $1 of every $7 in pandemic jobless aid – with a total of $135 billion estimated to have been taken and used on luxury purchases ranging from cars to alpaca farms

Massive Fraud in Pandemic Jobless Aid Exceeds $135 Billion

A report released in September 2023 revealed the shocking extent of fraud in pandemic jobless aid programs, with opportunistic individuals possibly stealing as much as $1 of every $7 in unemployment benefits. The total estimated amount stolen reaches a staggering $135 billion, which has been misused on luxury purchases ranging from cars to alpaca farms.

Government Accountability Office (GAO) Report

The report was conducted by the Government Accountability Office (GAO) and was made public seven months after an initial estimate of around $60 billion being stolen. The GAO suggests that the actual amount stolen is likely more than double this initial estimate, with the true extent of the fraud potentially never being fully known.

Immediate Action Needed

Lawmakers and officials are alarmed by these findings, with Ways and Means Chairman Jason Smith describing it as “the greatest theft of taxpayer dollars in American history.” He emphasizes the need for immediate action to recover as much taxpayer money as possible.

Pandemic Unemployment Benefit Programs

During the pandemic, the government introduced expanded unemployment benefit programs as part of the CARES Act, which added federal money to state unemployment benefits. This led to increased scrutiny, with fraudsters taking advantage of the situation. They exploited the additional $600 payments from the federal government, which were later reduced to $300.

Limited Recovery and Investigations

While there have been efforts to recover stolen funds, states have reported only about $6.8 billion in pandemic-era unemployment overpayments, including $1.2 billion deemed fraudulent. This amount represents less than 1 percent of the estimated $135 billion in fraudulent claims.

Incentives to Combat Fraud

Efforts are being made to combat fraud through legislative measures like the Protecting Taxpayers and Victims of Unemployment Fraud Act. However, the Biden Administration has expressed opposition to the bill, citing concerns about its impact on state unemployment programs and program integrity.

Notable Cases of Fraud

Several individuals have been caught and prosecuted for their involvement in pandemic relief fraud. Some of these cases include:

  1. John Richardson & Micahia Taylor: The couple from Detroit filed bogus COVID unemployment claims worth $2.5 million, leading to their imprisonment.
  2. Nuke Bizzle: A rapper who scammed California’s Employment Development Department out of $700,000, bragging about it in a music video. He received a six-year sentence.
  3. Milwaukee Street Gang: A street gang in Milwaukee allegedly used stolen pandemic relief money for a murder-for-hire scheme, along with illegal purchases of guns, drugs, clothing, jewelry, and vacations.
  4. Kayla Giles & Teri Thibodeaux: These individuals were accused of stealing more than $300,000 in unemployment benefits in at least six states using stolen identities.
  5. Eric Jaklitsch: He used a wig to fool facial recognition software and collected $4.5 million in fake unemployment payments. He was sentenced to over six years in prison.
  6. Dana McIntyre: The former owner of a pizza shop used fraudulent Paycheck Protection Program loans to buy an alpaca farm and other personal expenses. He received a two-year prison sentence.

These cases illustrate the wide range of fraudulent activities that took place during the pandemic, resulting in substantial losses of taxpayer dollars. Efforts to recover these funds and prevent future large-scale thefts continue to be a priority for lawmakers and law enforcement.

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