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House Republicans kick off investigation into pandemic relief fraud

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(WASHINGTON) — Kicking off its investigations into the Biden administration on Wednesday, the Republican-led House Oversight Committee will hold a hearing on COVID relief money spent during the pandemic, which Republicans argue was a “prescription for waste, fraud and abuse” and has been ignored by Democrats for the last two years of Biden’s administration.

“We owe it to the American people to get to the bottom of the greatest theft of American taxpayer dollars in history,” Republican Chairman James Comer of Kentucky will tell the committee, according to prepared remarks shared with ABC News.

“We must identify where this money went, how much ended up in the hands of fraudsters or ineligible participants, and what should be done to ensure it never happens again,” Comer is expected to say in his opening remarks.

About $5 trillion was set aside for pandemic response and recovery under the Trump and Biden administrations, and nearly 90% of it had been spent by last November, according to the Government Accountability Office.

The committee intends to evaluate that money, which was given out largely as grants, loans and unemployment insurance, so as “to ensure those funds were appropriately used to respond to the pandemic, and not wasted on ineligible payees or unrelated matters,” per Comer’s remarks.

The committee will hear from witnesses from three nonpartisan groups that have been tracking COVID-era fraud on Wednesday, each of which have found billions of dollars of money that has been stolen from programs intended to help people during the height of the pandemic.

One of those groups, the Pandemic Response Accountability Committee, reported on Monday that over $5 billion of pandemic aid that was supposed to reach small businesses suffering from COVID-19 shutdowns may have been instead eaten up by fraudsters.

The report found that in the rush to get assistance out the door, the Small Business Administration granted billions of dollars under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) to applicants who used social security numbers that ultimately didn’t match up with the person applying.

“We determined that 69,000 questionable [social security numbers] were used to obtain $5.4 billion in pandemic loans and that another 175,000 questionable [social security numbers] were used in applications that were not paid or approved,” Michael Horowitz, Chair of the Pandemic Response Accountability Committee (PRAC), is expected to tell the Oversight committee on Wednesday, according to prepared remarks.

The proper checks and balances were not in place in time, PRAC found, but there was tremendous pressure to get massive amounts of money quickly to businesses that were on the brink because of COVID-19 interruptions.

The result was that many pandemic relief programs were left open to fraud.

That conclusion will be reiterated by David Smith, the assistant director of the Office of Investigations within the U.S. Secret Service, which has been overseeing criminal investigations into COVID relief money fraud.

“My colleagues and I have seen and countered the full spectrum of pandemic-related fraud to date,” Smith is expected to say before the committee, according to a copy of his remarks shared with ABC News.

“From N-95 mask non-delivery schemes to synthetic accounts used in identity theft scams to apply for millions of dollars in loans. From medical facilities targeted with ransomware attacks at the height of the pandemic to prison inmates applying for unemployment benefits,” Smith is expected to say.

And while a “similar dynamic” has been seen with other major relief efforts and natural disasters, which leave ripe opportunities for scam and fraud, the money stolen under COVID “was and is substantial,” Smith will say.

The Secret Service has seized over $1.43 billion in funds that were obtained by fraudsters, according to Smith’s remarks, with 2,300 investigations into unemployment insurance fraud and 2,900 investigations into loans and grants given to businesses.

Over 1,000 people have also been convicted, forced to return money or charged with defrauding the programs, though that work is ongoing, according to Comptroller General Gene Dodaro of the Government Accountability Office, who will also be a witness before the Oversight Committee on Wednesday.

Just over 1,000 people have pleaded guilty and 38 people have been convicted of defrauding COVID-19 relief programs, Dodaro is expected to tell the committee.

“We have found a range of internal control shortcomings across a wide range of programs and made many recommendations that agencies are in the process of implementing,” Dodaro is expected to say.

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