COVID-19 relief fraud likely 'biggest fraud' in US history, tax watchdog warns

"It's estimated that every dollar of wages saved by the relief money cost American taxpayers $4.13," said Taxpayers Protection Alliance's Dan Savickas.

Updated: September 23, 2022 - 7:02am

While the federal government has allotted more than $5 trillion to COVID-19 economic relief and stimulus, undetermined billions in taxpayer dollars have been fraudulently siphoned from the aid spending, likely amounting to the "biggest fraud that the country's seen," according to Americans for Tax Reform.

"The U.S. federal government has already dedicated over $5 trillion to combatting the COVID-19 pandemic," Dan Savickas, director of tech policy at Taxpayers Protection Alliance, told Just the News on Wednesday. "These funds came with very few safeguards to ensure they ended up in the hands of families and businesses that actually needed it.

"It's estimated that every dollar of wages saved by the relief money cost American taxpayers $4.13. This is not to mention also the inflation that came as a result of this profligate spending."

In June, U.S. inflation hit a 40-year high of 9.1%.

"Too many special interests were able to take advantage of the language of these relief bills to line their pockets, leaving taxpayers on the hook," Savickas added. "This is just the waste we know about."

Some of the most egregious fraud numbers include:

The government has recovered more than $10 billion worth of fraudulent payments made through federal pandemic relief programs as of June, according to data released by the House coronavirus panel.

Meanwhile, the IRS is planning on taxing individuals who defrauded the PPP program to illicitly obtain COVID relief funds.

It's "not an exaggeration that this is probably the biggest fraud that the country's seen," Americans for Tax Reform's Mike Palicz told Just the News on Wednesday.

"The top voter issue right now is inflation," said Palicz, the advocacy group's federal affairs manager. "To have that driven by spending that's gone to record-setting fraud is infuriating."

There was a "complete lack of oversight and safeguards from the beginning" for COVID relief spending, and the Democratic Congress showed no interest in "providing oversight" for it, Palicz alleged.

"[N]o one really knows what the true number is" for the fraudulent payments total, except that it is "really big, which is terrifying," he added.

The Department of Labor inspector general's office was overwhelmed by the volume of COVID relief fraud referrals it received from the DOJ since the pandemic began because it lacked the resources to monitor that level of spending, Palicz observed from the inspector general report.

Savickas said there is "surely more" fraud that has not yet been uncovered "and may never be."

"President Biden now simultaneously claims 'the pandemic is over' while asking for billions more in aid that will — in all likelihood — suffer from the same waste, fraud, and abuse as those that came before," he added. "The government needs to take a step back to give taxpayers a break."

David Williams, president of Taxpayers Protection Alliance, told the "Just the News, Not Noise" TV show on Wednesday that the government was "so anxious to spend money, but they're not anxious to do the oversight."

The federal government "spends this money so fast that there's no time to do the oversight," he said. "And the grifters, the criminals, they know this — they know that the government doesn't have these checks and balances in place," which is why the $3.7 billion from FEMA can "just disappear."

South Carolina Democratic Rep. James Clyburn, the chairman of the House coronavirus panel, has blamed COVID relief fraud on the Trump administration, which was in power for seven months after enactment of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act before Joe Biden defeated the former president in the 2020 election.

"These relief programs were vital to helping Americans in need during the economic crisis brought on by the coronavirus pandemic," said Clyburn, a close Biden political ally. "However, as the select subcommittee reported last year, the Trump administration failed to take basic steps to prevent expansive fraud against them. Under the Biden administration, federal investigative and law enforcement agencies have been working hard to undo the damage and reclaim funds for the American taxpayer."

Just the News Spotlight