WASHINGTON: Over $200 billion from the US government’s Covid-19 relief programmes were potentially stolen, a federal watchdog said on Tuesday.

The watchdog added that the US Small Business Administration (SBA) had weakened its controls in a rush to disburse the funds.

At least 17 per cent of all funds related to the government’s coronavirus Economic Injury Disaster Loan (EIDL) and Paycheck Protection Programme (PPP) schemes were disbursed to potentially fraudulent actors, according to a report by the SBA’s office of inspector general.

The experts put the potential fraud estimate at $36bn and added that over 86pc of that likely fraud took place in 2020, when the administration for former president Donald Trump was in office.

Over the course of the pandemic, the SBA disbursed about $1.2 trillion of EIDL and PPP funds.

The SBA disputed the more than $200bn figure put forward by the watchdog and said the inspector general’s approach had significantly overestimated fraud. The state is currently probing many fraud cases pegged to US government assistance programmes.

The investigation regarding alleged frauds was initiated in 2021 by Attorney General Merrick Garland, who launched a Covid-19 Fraud Enforcement Task Force.

In September 2022, the inspector general for the US Labour Department said fraudsters likely stole $45.6bn from the United States’ unemployment insurance programme during the coronavirus outbreak by applying tactics like using Social Security numbers of deceased individuals.

Also in September, federal prosecutors charged dozens of defendants, who were accused of stealing $250m from a government aid programme that was supposed to feed children in need during the pandemic.

Due to recurring fraud cases, the US Justice Department tapped federal prosecutor Kevin Chambers to lead its efforts to investigate alleged fraud schemes last year.

Published in Dawn, June 29th, 2023