Alarming signs of Covid-19 fraud have been cropping up by an unprecedented amount the past year, with scammers obtaining money off relief programs such as the pandemic-era Paycheck Protection Program (PPP), non-existent small businesses requesting and receiving multi-million dollar grants, etc. Because of the desperate need for timely covid relief, federal relief systems have operated largely on an honor system, lacking general oversight and made it very easy to hack and exploit. One extreme example has taken place in Minnesota, where 47 individuals, through Feeding Our Future, an organization meant as a sponsor for underprivileged children, fraud scheme were accused of siphoning 250 million dollars off the government’s Federal Child Nutrition Program over the course of the pandemic. They used this to buy “jewelry, luxury cars, real estate” and more.
Fraudulent activity exposes the multiple defects in various stages of the rashly stitched-up system, including outdated technology and a lack of enforcement. In regards to the Minnesota fraud, according to the first source, Republicans have criticized the handling of the situation by Democratic Minnesota Gov. Tim Walz and company; they claim that he and other leading Democrats should have done more in preventing the fraud, such as pushing for FBI attention when they found out about the fraud.Meanwhile, the second source contains criticism of the federal government’s handling of the federal relief programs, asserting that the Department of Justice should have funded more watchdog groups and have smarter IT systems that used technology to prevent fraud. It makes the argument that the federal government should have done more to prevent the fraud in the first place, instead of planning on blindly dispersing money and then tracing illicit activity afterwards, because there aren’t enough resources to catch ‘em all, including the smaller-case scammers, whose defrauded payments really add up to the 100+ billion dollars stolen from the government.
The state responsibility and federal responsibility is contended in the sources. I believe this shows the dynamic of cooperative federalism and how it is difficult to balance the responsibilities between federal and state. Government grants may be hard to follow through on due to state and local cooperation. Along with this, the incompetency of the government’s prehistoric technology is obvious, and more investment in these systems would make systems more efficient and less prone to fraud.
https://www.washingtonpost.com/opinions/2022/09/25/covid-pandemic-relief-fraud-response/
https://www.usnews.com/news/politics/articles/2022-09-26/gop-attacks-minnesota-governor-in-250m-food-fraud-case
1 comment:
COVID-19 relief fraud unfortunately goes far beyond the PPP program, as many people have also taken advantage of government unemployment benefits as well. The federal government also funded increased unemployment benefits during the peak of the COVID-19 pandemic, and unfortunately this also led to increased fraud. Using fraudulent Social Security information, billions of dollars in unemployment relief has been stolen (similar to small business relief programs), with the government having currently charged 1,000 people and investigating over 190,000 other cases of potential fraud. Hopefully the U.S. can find all the fraudulent cases, and I agree that the U.S. needs to seriously improve its technology to help prevent this problem from ever happening again.
Source: https://www.cnn.com/2022/09/22/politics/covid-pandemic-unemployment-benefits-fraud/index.html
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