“What didn’t happen was even minimal checks to make sure that the money was getting to the right people at the right time.”
We’ve known about the fraud associated with the COVID relief program known as the Paycheck Protection Program (PPP):
Many who participated in what prosecutors are calling the largest fraud in U.S. history — the theft of hundreds of billions of dollars in taxpayer money intended to help those harmed by the coronavirus 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, or PPP. 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.
But government officials revealed more details to NBC’s Lester Holt:
Justice Department 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, the chair of 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, Horowitz said.
The lenders did not do much to verify the information given to them by the borrowers. That allowed the borrowers to over-exaggerate “their numbers of employees or created companies out of whole cloth.”
Congress told the SBA that “lenders ‘will be held harmless for borrowers’ failure to comply with the program criteria.'”
Haywood Talcove, CEO of Lexis Nexis, which helps the government verify identities, said people could go “on state websites” and use “the names of existing businesses or registered new fake ones.”
Talcove said: “There’s absolutely no security on there. There’s no validation of any information. 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.”
One academic paper estimated $76 billion was stolen. The SBA inspector general found $78.1 billion in the Economic Injury Disaster Loans, another COVID relief program. The Secret Service estimates $100 billion was stolen.
The Pandemic Response Accountability Committee found that a Houston gas station’s number was used 150 times on applications.
- David Hines of Miami got $3.9 billion. he bought a Lamborghini, high-end clothes, and stayed at luxury hotels.
- Florida man got $7.2 million. He bought a 12,579-square-foot mansion and three cars: Lincoln navigator, Maserati, and Mercedes-Benz.
- California couple got $18 million. They bought three houses, diamonds, expensive furniture, and gold coins.
Then there’s Danielle Miller. Federal prosecutors claimed she stole from a Massachusetts state website and used the information to get relief money. Miller showed off her lifestyle on social media:
In 40 minutes, she had $100,000 in taxpayer money, court documents say. She soon booked a private jet from Florida to California, where she spent $5,500 at a luxury hotel in West Hollywood, court papers allege.
On her Instagram account, which has 34,000 followers, Miller posted photos from two posh hotel stays paid for with criminal proceeds, prosecutors say. Her bio: “I want that.”
“Miller’s criminal record includes arrests in five different states, many of which were related to larceny and identity-related fraud,” the complaint in the case says.
Miller pleaded not guilty, but court records now say she intends to plead guilty to an unspecified charge.
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