US failed to stop fraud in COVID loan program, says Clyburn | Richmond Free Press

The United States failed to take basic steps at the start of the coronavirus pandemic to prevent fraud in a federal aid program intended to help small businesses, draining funds and making people more vulnerable to theft. identity, said the chairman of a House panel examining the payments. Tuesday.

Democratic Representative James Clyburn has blamed the Trump administration for problems with the COVID-19 economic disaster loan program, overseen by the US Small Business Administration, amid revelations that up to 20% of the money – tens of billions of dollars – may have been attributed to fraudsters.

Mr Clyburn said the Biden administration has implemented measures to identify potential fraud and ordered loan officers to process clues of fraud before approving loans, while Congress has invested in prevention fraud and liability.

Rep. Steve Scalise, the House’s No. 2 Republican, said the Trump administration and Congress worked together at the start of the pandemic, when uncertainty was rampant and much of the economy was blocked, to provide “much needed relief as quickly as we can to help save as many jobs as possible” and prevent the economy from collapsing.

Mr. Scalise, R-La., Said Democrats were undermining successes, and he asked why the House coronavirus panel, chaired by Mr. Clyburn, wasn’t looking into the enhanced unemployment insurance program which was plagued by “gross and unprecedented fraud” and is a “major contributor” to high inflation rates.

“I hope that in our oversight of pandemic programs, my fellow Democrats will be able to recognize the difference between what was necessary to save the economy during an unprecedented pandemic and the promotion of a bias-inducing partisan agenda. inflation,” he said.

Clyburn, of South Carolina, said the subcommittee will determine what more needs to be done to bring perpetrators of fraud to justice and how to protect future emergency programs.

Mr Clyburn said he supported extending the statute of limitations for such fraud cases to give investigators more time to unravel complex potential crimes. Witnesses at the hearing suggested standardizing data collected by states to make it easier for federal authorities to spot potentially fraudulent schemes.

The SBA’s Office of Inspector General estimated that at least $80 billion distributed from the $400 billion EIDL program could have been fraudulent, much of it in scams

using stolen identities. Separately, select subcommittee staff released a report on Tuesday that found some 1.6 million loan applications may have been approved but not assessed.

Fraud has overwhelmed federally funded and state-administered enhanced unemployment insurance programs. There was so much aid to governments that many struggled to find a way to spend it all within the original regulations. And there have been questions about whether the Paycheck Protection Program to keep employees on the job was worth it.

The Secret Service said in December that nearly $100 billion had been stolen from COVID-19 relief programs, basing that estimate on its cases and data from the Labor Department and the Small Business Administration.

Comments are closed.