What are we missing? Billions stolen, mere millions recovered from pandemic fraud

by | Jul 16, 2023

  • The COVID-19 pandemic led to a significant opportunity for fraudsters, with an estimated $280 billion stolen and $123 billion misused or wasted in COVID-19 relief funds.
  • Several high-profile cases of fraud have been uncovered, including individuals in Florida who fraudulently obtained millions of dollars through programs like the Paycheck Protection Program (PPP).
  • The extent of the fraud is likely much higher than what has been uncovered so far, highlighting the need for better oversight and prevention measures to protect public funds during crises.

The 2020 global pandemic shook the world in ways never thought imaginable, including the biggest opportunity for fraudsters in history. A recent Associated Press analysis revealed a jaw-dropping figure – a total of $280 billion stolen and $123 billion wasted or misused in COVID-19 relief funds. That’s a grand total of $403 billion – with a “b.” And that’s just the stuff we think we know about. All told, that’s a mind-boggling 10% of the $4.2 trillion the U.S. government spent in pandemic relief aid. The scale of this malfeasance is like trying to understand and appreciate the distance from Earth to Pluto. The human mind has a difficult time grasping large-scale numbers.

But the truly mind-boggling point isn’t the sheer scale of the fraud we know about. It’s the question of what we don’t know about – what hasn’t been uncovered – yet.

Since the inception of the $800 billion Paycheck Protection Program and the equally abused $348 billion Economic Injury Disaster Loan (EIDL) program, media outlets have covered a number of high profile cases. Here in Florida, that included former State Rep. Joe Harding, who pled guilty to money laundering, wire fraud, and making false statements. But the attention on Harding was more about his position as a public official, and not the amount he actually stole from taxpayers, which was relatively small – just $150,000 – according to the Department of Justice.

In fact, dozens upon dozens of cases have been identified and prosecuted so far, some of them substantially larger than Harding’s case. In fact, Florida was one of just three states into which the U.S. government deployed investigative teams, California and Maryland were also chosen, to zero in on criminal organizations that are suspected of stealing from public programs offering small business loans and unemployment insurance.

The teams working with the U.S. Attorney’s Office in Florida, California and Maryland have the authority to investigate and prosecute COVID-19 economic relief cases anywhere in the country — without the Justice Department in Washington calling the shots, similar to how Medicare fraud cases are handled.

The Florida task force has turned up a number of cases that haven’t gotten a lot of media attention.  Florida Man, and Florida Woman, it turns out, are some of the most capable fraudsters on the planet. Case in point: a woman and her male co-conspirator recently pled guilty to have conning the PPP out of more than $3.3 million by presenting false information about the woman’s company. She ended up netting $2 million in ill-gotten proceeds, and now she’ll spend 44 months in prison.

Then there’s the story of a 27-year-old scam-artist who saw the PPP as his personal piggy bank. The Florida Man filed numerous fraudulent applications, netting himself over $2 million. He blew the windfall on high-end designer gear and luxury items, including a Lamborghini Huracán EVO and Rolex and Hublot watches. But, like Icarus flying too close to the sun, his lavish lifestyle got the best of him, and he now faces up to 132 years in prison.

One of the bigger cases, though, came courtesy of a former South Florida regional manager for a leading national bank. The man and his co-conspirators attempted to defraud the PPP and EIDL programs out of approximately $25 million. Fortunately, the conspiracy was uncovered by the watchful eyes of a co-worker after only about $15 million in losses. Sadly, the investigation has only managed to recover about $800,000 so far.

These are just the most egregious Florida cases. There are dozens and dozens of others that have been uncovered, too. A list released in late 2022 by the United States Attorney’s Office shows 22 other cases prosecuted so far. Unfortunately, despite the effort by law enforcement to crack down, they’d only been able to recover $23.5 million through last year.

The stories paint a grim picture of the misuse of funds meant to help those genuinely in need. It’s like someone breaking into a food bank and stealing meals from the mouths of the hungry. While the stories have been brought to light, how many more are still lurking in the shadows, yet to be uncovered?

This means that the actual amount pilfered is likely much higher than the $403 billion we currently know about.

Even so, $403 billion is a staggering amount of money. To put this figure into perspective, imagine you decided to count every one of those dollars all the way to 403 billion. If you counted at a rate of two numbers per second, without stopping for sleep, meals, or breaks, it would take you around 6,360 years to finish counting. Even if you started when Julius Caesar crossed the Rubicon, you’d still have 4,300 years left to go as of today.

This grand swindle makes the infamous Bernie Madoff, who swindled investors out of $64.8 billion, seem like a petty pickpocket. It’s a harsh reminder that the United States government is really good at printing money, but absolutely horrible about accounting for it.


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