Waste of the Day: Covid Fraud Was “Readily Preventable”

Topline: Fraudsters stole an estimated $79 billion from the federal government using fake Social Security numbers during the Covid-19 pandemic. The crime was “readily preventable,” but federal agencies had no system in place to check if the Social Security numbers were legitimate, according to a June 4 fraud alert from the Pandemic Response Accountability Committee.

Covid-19 assistance programs riddled with fraud

Key facts: The audit reviewed three Covid-19 assistance programs — unemployment insurance, the Paycheck Protection Program and Economic Injury Disaster Loans — and estimated that up to 1.5 million applicants had Social Security numbers that were either fake or stolen. 

Auditors arrived at their estimate using an “analytics platform” provided by Congress with data from the Social Security Administration. That raises an obvious question: why is the government first verifying applicants’ Social Security numbers now, instead of before the fraudulent loans were handed out?

Common sense would dictate that federal agencies should have access to Social Security data to verify taxpayers’ identity. But, according to the fraud alert, there is too much red tape in the way. 

“The process to implement new Social Security Number verification agreements among agencies and address legal questions regarding the permissibility of information-sharing can be lengthy,” auditors wrote.

“Prior to the next natural disaster, health crisis, financial failure, or other emergency, it is vital for program administrators to establish SSN verification agreements in a timely manner so that an information exchange can be set up as a part of program integrity controls to prevent fraud, waste, abuse, and mismanagement and protect taxpayer funds from improper payments, as Congress intends in creating such emergency relief programs.”

Not required to list their dates of birth

Applicants for Paycheck Protection Program loans were not even required to list their date of birth. If they were, the auditors said they likely would have been able to find even more than $79 billion of fraud.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.

Background: Federal agencies are not the only ones missing vital information from the Social Security Administration. OpenTheBooks recently filed a Freedom of Information Request for a list of Social Security payments broken down by age bracket, in an attempt to verify President Trump’s claim that there are people getting checks who were born in the 1600’s.

Our auditors were told that no records exist. Either the Social Security Administration is hiding the information, or there genuinely is no one keeping track of payments by age group. Either way, something is amiss.

Summary: The federal government has access to a list of every American’s Social Security number. There is no reason not to use that list to prevent billions of dollars of fraud.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.