PRAC Attacks Pandemic Relief Fraud Head-On

June 15, 2022 by Alexa Hornbeck
PRAC Attacks Pandemic Relief Fraud Head-On
Michael Horowitz, inspector general of the United States Department of Justice, who also serves as chair of the Council of the Inspectors General on Integrity and Efficiency's Pandemic Response Accountability Committee at the Select Subcommittee on the Coronavirus Crisis hearing on June 14.

WASHINGTON — When Sholanda Thomas, 38, an inmate at the Central California Women’s Facility in Chowchilla, sent her own and other inmates’ personal identifying information to a friend on parole, she had the intention of committing pandemic fraud.

Thomas falsely represented that she and other inmates had been working as carpet cleaners, hair stylists, mechanics and other jobs; impossible as they were incarcerated. 

Despite the red flags, Thomas managed to collect over $250,000 in unemployment benefits from the state of California. 

“Fraud prevented many vulnerable Americans from receiving the much-needed aid they justly deserved,” said Rep. Carolyn Maloney, D-N.Y., during a hearing held by the Select Subcommittee on the Coronavirus Crisis on Tuesday.


“Programs, such as the Paycheck Protection Act, and the [COVID-19 Economic Injury Disaster Loan] program, ran out of funds so quickly… individuals in small businesses and communities of color were disproportionately unable to receive any relief, or the relief that they needed,” continued Maloney.

While pandemic relief aid has helped curb the economic suffering caused by the COVID-19 pandemic for many Americans, a new report from the subcommittee shows a high volume of criminals took advantage of the pandemic by stealing million dollars in aid.

In the nearly 40-page report titled, “How the Trump Administration Wasted Taxpayer Dollars by Leaving the COVID-19 EIDL Program Vulnerable to Fraud,” the subcommittee examined the Small Business Administration Economic Injury Disaster Loan program’s operations during the pandemic.

The findings indicate that $86 billion dollars in EIDL funds were disbursed to applicants with fraud alerts on their applications, and at least $163 billion in pandemic unemployment benefits could have been paid improperly, with a significant portion attributable to fraud. 

“Individuals who had challenges applying through the internet…were not able to get benefits intended for them,” said Michael Horowitz, inspector general of the U.S. Department of Justice and chair of the Pandemic Response Accountability Committee, during the hearing.

Horowitz said many of the individuals were from rural communities which did not have strong internet service, or elderly applicants.

“So many agencies, we found, were unprepared to deal with these challenges,” said Horowitz. 

“The work of the PRAC and our partner IGs, have already led to more than 1,200 indictments and complaints, about 950 arrests, and over 450 convictions,” continued Horowitz.


PRAC is an independent oversight committee within the Council of the Inspector General on Integrity and Efficiency, created by the Coronavirus Aid, Relief and Economic Security Act, or CARES Act of 2020 to ensure that the pandemic-related pieces of legislation totaling over $5 trillion in government funds were not misspent. 

“The only way to effectively oversee $5 trillion in relief spending is with data,” said Horowitz.

PRAC created the Pandemic Analysis Center of Excellence, or PACE, to deliver analytic audits and investigative support. 

“In the CARES Act, Congress gave us various hiring authority, and we’ve used that successfully to bring on board a number of data scientists,” said Horowitz.

The Biden administration appropriated $40 million in additional funds to PRAC, as part of the American Rescue Plan.

Horowitz said so far 20 data scientists are helping IG offices look into the data and find anomalies and issues to examine the entire scope of the pandemic fraud wrongdoing.

“Thousands of applicants use the same social security number to get unemployment benefits or PPP benefits, or EIDL benefits. The same telephone numbers are used in thousands of applications, the same… mailing addresses,” said Horowitz.

Horowitz said PRAC has identified over one million suspiciously used social security numbers for multiple applications, and the team is identifying whether the names on the applications match up with that of the Social Security Administration. 

The subcommittee report reveals that under the Trump administration, even when EIDL applications were reviewed by SBA employees, reviewers were directed to approve applications containing indications of identity theft without taking action to ensure the applications were legitimate. 

SBA changed this guidance to direct loan reviewers to both obtain government identification and ask for personal identifying information by the phone where there were indications of identity theft under the Biden administration. 

Two bills passed the House earlier this month, and a third is currently pending on the Senate floor, which would assist PRAC’s efforts to fight pandemic-related fraud. 


“The statute of limitations that the House passed would be extended for PPP and EIDL fraud to 10 years… hopefully the Senate will pass it and I appreciate the House doing so already,” said Horowitz.

Alexa can be reached at [email protected] 

A+
a-

In The News

Health

Voting

In The News

More Flexibility Proposed for Student Debt Forgiveness

New rules proposed by the Biden administration on Wednesday would make it easier for borrowers to get their federal student... Read More

New rules proposed by the Biden administration on Wednesday would make it easier for borrowers to get their federal student debt forgiven through several existing programs. The action is intended to overhaul relief programs that have been criticized for their burdensome paperwork requirements and long processing... Read More

July 6, 2022
by Dan McCue
6th Circuit Revives Administration Guidance on Immigration Enforcement

CINCINNATI, Ohio — The 6th U.S. Circuit Court of Appeals on Tuesday tossed out a lower court order that had... Read More

CINCINNATI, Ohio — The 6th U.S. Circuit Court of Appeals on Tuesday tossed out a lower court order that had partially blocked a Biden administration directive on immigration enforcement. That guidance, issued by Homeland Security Secretary Alejandro Mayorkas in September 2021, directed ICE agents to prioritize... Read More

July 5, 2022
by Tom Ramstack
Drug Distributors Win Lawsuit Accusing Them of Opioid Abuse

CABELL COUNTY, W.Va. — A federal judge in West Virginia on Monday ruled in favor of drug distribution companies accused... Read More

CABELL COUNTY, W.Va. — A federal judge in West Virginia on Monday ruled in favor of drug distribution companies accused in a lawsuit of creating a public nuisance by distributing opioids that kill thousands of Americans each year. The judge said his ruling is "not based... Read More

July 5, 2022
by Dan McCue
Energy Efficiency, Green Jobs Standards Now Law in New York State

NEW YORK — New York Gov. Kathy Hochul signed a legislative package of three bills into law on Tuesday that... Read More

NEW YORK — New York Gov. Kathy Hochul signed a legislative package of three bills into law on Tuesday that proponents say will promote clean energy development and energy efficiency while reducing greenhouse gas emissions across the Empire State for decades to come. It’s all about... Read More

July 5, 2022
by Kate Michael
Despite White House Denials, GOP Bill Attempts to Prevent Abortion Facilities on Federal Land

WASHINGTON — Elizabeth Warren may be writing op-eds in the New York Times and Alexandria Ocasio-Cortez  calling on the government... Read More

WASHINGTON — Elizabeth Warren may be writing op-eds in the New York Times and Alexandria Ocasio-Cortez  calling on the government to declare a medical emergency and “open abortion clinics on federal lands in red states right now,” but the Biden administration continues to reiterate that there... Read More

July 5, 2022
by Dan McCue
Registered Nurses’ Union Calls on Senate to Pass Abortion Rights Bill

WASHINGTON — The nation’s largest union representing registered nurses is calling on the U.S. Senate to pass the Women’s Health... Read More

WASHINGTON — The nation’s largest union representing registered nurses is calling on the U.S. Senate to pass the Women’s Health Protection Act as soon as possible after it returns from its Independence Day recess on July 11. The request, made in a letter to the Senate... Read More

News From The Well
scroll top