Checks are printed at the US Treasury Department Philadelphia Finance Center in Philadelphia, Pennsylvania.
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The Secret Service has seized stolen Covid unemployment benefit funds and returned them to states, agency officials said on Wednesday.
Programs in at least 30 states received the money after the agency found recipients fraudulently applied for pandemic-related unemployment.
“This is typical of the cyber fraud that we deal with annually. It is only put together on the basis of additional funds (from) the Covid aid,” said Roy Dotson, the Secret Service’s special representative in charge, to CNBC. “The criminals took full advantage of the programs to try to steal from them.”
He said the $ 2 billion returned to states is a “conservative estimate” and the investigation into pandemic-related fraud is ongoing. He said last year that the Secret Service had sent advice to financial institutions to flag potentially fraudulent accounts that the money might have been deposited into.
Dotson says scammers have typically stolen the identities of people who are eligible for unemployment benefits. In other cases, he said, identities were stolen from people who had not even applied for unemployment.
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The rapid roll-out of the Pandemic Unemployment Assistance program made it easy for scammers to become victims. The Inspectorate General of the Department of Labor said in a report released in March that at least $ 89 billion of the estimated $ 896 billion in Unemployment Program funds “could be inappropriately paid, a significant portion of which is due to fraud”.
The Ministry of Labor has announced that it will work with the secret service, the Ministry of Justice and other agencies “to vigorously pursue those who defraud the unemployment insurance program and secure benefits for the unemployed.”
The Secret Service also announced that it had seized more than $ 640 million in funds defrauded primarily from the Paycheck Protection Program and the Economic Injury Disaster Loan Program. Around 690 inquiries into unemployment insurance and 720 inquiries into these two programs were initiated.
CNBC previously announced that millions of dollars in Covid-19 funds had been laundered through online investment platforms.
NBC News reported in February that most of the 50 state employment agencies were unaware of the full extent of their losses.
“I can imagine this will take a year or two,” said Dotson.