Using digital tools, Internet crooks here and abroad are ripping off taxpayers for hundreds of billions of dollars in federal benefit programs.
Anti-waste and fraud controls were so lax on trillions of tax dollars being spent by federal and state government agencies on COVID-19 pandemic relief benefits that as much as half of those funds actually went to entities in China, Russia, and other U.S. adversarial nations, a congressional panel was told on Thursday.
“Data on this is still being evaluated, but there are some estimates that half of the Pandemic unemployment assistance fraud went to adversarial nations,” said Linda Miller during testimony on Oct. 19 before the Oversight Subcommittee of the House Ways and Means Committee.
Her comments came in response to a question from Rep. Brian Fitzpatrick (R-Pa.) concerning a recent federal prosecution of a group of Chinese government-linked hackers who stole an estimated $20 million in relief funds.
Ms. Miller is the former Deputy Executive Director of the Pandemic Response Accountability Committee (PRAC) in the Department of Justice (DOJ). Michael Horowitz, the DOJ Inspector General, heads the PRAC office. She is also the former Assistant Director of the Government Accountability Office’s (GAO) Forensic Audits and Investigative Service group. She is now an anti-waste and fraud expert consultant.
“The nearly $5 trillion in government relief spending during the COVID-19 pandemic—much of which was disbursed as direct payments to citizens—created the perfect storm for fraud. A combination of inadequate oversight and internal controls, large-scale organized fraud rings, and antiquated data and information systems contributed to the massive, widespread fraud we saw during the pandemic,” Ms. Miller told the subcommittee during her prepared testimony.
“Agencies were unprepared for the fraud they encountered largely due to a lack of attention on fraud risks. GAO issued its Framework for Managing Fraud Risks in Federal Programs in 2015, but regrettably, little attention was paid to establishing the preventative controls GAO called for to manage fraud risks,” Ms. Miller testified.
Rep. David Schweikert (R-Ariz.) the subcommittee’s chairman, recalled a telephone call he received during the pandemic from his wife, who managed an Arizona surgery center with 20-30 employees.
