How deep is covid financial fraud, waste?
U.S. voters must make the political class fear them when this occurs
A Chicago man was convicted in early July of fraudulently obtaining $2.7 million in money meant to aid U.S. businesses in covid relief. This is part of hundreds of billions in taxpayer funds obtained fraudulently or wasted of the trillions spent on covid relief.
The U.S. Attorney’s Office in Northern Illinois reported the following details of the case:
From April to November 2020, Quamdeen Amuwo, 41, participated in a scheme to defraud the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program;
Amuwo submitted SBA applications regarding business he supposedly owned;
Those applications contained false statements regarding the entities’ owners, employees, revenues, costs, and dates of establishment.;
Amuwo also provided false business registration forms and bogus personal identifying information of the supposed owners.
Amuwo is part of more than $200 billion in the U.S. that the Small Business Administration (SBA) Office of Inspector General (OIG) confirmed was lost by fraud or waste from money allocated to help businesses following covid lockdowns in 2020. It is just a fraction of the financial fraud or waste connected to the pandemic.
The SBA oversaw separate programs to aid business owners and their employees left without jobs during the lockdowns. The Associated Press conducted its own review of money spent on pandemic relief. It reported that an “analysis found that fraudsters potentially stole more than $280 billion in covid-19 relief funding; another $123 billion was wasted or misspent.”
The 43-page SBA OIG report released in late June reveals several “fraud indicators.” These included everything from romance to kickback schemes to suspicious email addresses. While people like Amuwo have been prosecuted, the AP reported the SBA is pursuing 80,000 leads. The AP also reported:
A 2022 study from the University of Texas at Austin found almost five times as many suspicious Paycheck Protection loans as the $20 billion SBA’s inspector general has reported so far. The research, led by finance professor John Griffin, found as much as $117 billion in questionable and possibly fraudulent loans, citing indicators such as non-registered businesses and multiple loans to the same address.
Meanwhile, former Fox News reporter Adam Housley has stated on Twitter over 2 years the amount of covid relief unemployment program fraud is $100 billion in California alone. Housley also reports it’s nearly $1 trillion nationwide.
The federal government reveals that 23 states have provided data on the fraud now available in a map.
The AP also reported:
‘Here was this sort of endless pot of money that anyone could access,’ said Dan Fruchter, chief of the fraud and white-collar crime unit at the U.S. Attorney’s office in the Eastern District of Washington. ‘Folks kind of fooled themselves into thinking that it was a socially acceptable thing to do, even though it wasn’t legal.’
The potential fraud, theft, or wrongdoing with taxpayer money doesn’t end there.
Zishan Alvi of Inverness, Illinois is alleged to be responsible for an $83.6 million fraudulent covid-19 testing scheme. Alvi said he is innocent. However, prosecutors allege Alvi, who co-owned and operated LabElite in Chicago, sought reimbursement for covid-19 tests that were never done, were done improperly, or were already paid for by clients. Alvi faces 10 counts of wire fraud and one count of theft of government funds.
The lab also had a service where people and companies could pay a fee to receive expedited covid-19 PCR test results. In December 2020 it enrolled in a federal health care program, which covered covid test costs for people without health insurance coverage, the indictment states.
Meanwhile, the pandemic spending issue in New York state is pay-to-play politics with Gov. Kathy Hochul. First reported by the Albany Times Union (it is paywalled), Digital Gadgets received a $637-million no-bid contract from the state to do covid tests. The firm gave the governor $300,000 before getting the contract on suspended bidding rules because of the pandemic. Government watchdog Bill Hammond of the Empire Center for Public Policy said Hochul's emergency pandemic powers, which she extended many times, allowed her to skirt normal bidding rules when choosing the company. He said:
‘She was using emergency powers, which is unusual, and bypassing the usual process of vetting the contract. She didn’t have to go through competitive bidding, she didn’t have to have the comptroller’s office and it ended up going to a pretty significant donor to her campaign.’
The one other item that has recently gained attention doesn’t involve fraud or theft, but it could fall into the category of covid financial waste. The National Institutes of Health, which worked to delegitimize the lab leak theory and was one of the central locations for covid policy, spent $1.15 billion over 2.5 years on long covid research and clinical trials. Long covid is believed to be symptoms ranging from debilitating fatigue to heart issues, some still sick after initial coronavirus infections in the pandemic’s first wave. NIH’s effort proved fruitless, accordion to the healthcare website STAT:
Among the trials announced so far, the NIH’s long covid initiative, called RECOVER, is studying only a handful of pharmaceutical treatments, along with several behavioral options. These treatments will not address the underlying biological issues of long Covid, say scientists and patient advocates who reviewed the newly public details about the studies.
The breakdown of NIH spending includes:
About 15% of the funding — $171.5 million — went to clinical trials, under the leadership of Duke University’s Clinical Research Institute;
$537 million to set up and study patient cohorts;
$149 million for studying biological samples and health records;
$122 million for following patients in the future; and
$56 million for administrative tasks provided by consulting firms RTI International and Deloitte.
This NIH funding “has been largely wasted,” said David Putrino, director of rehabilitation innovation at Mount Sinai and a clinician studying long covid.
Taxpayer money is wasted every year at every government level. Strangely, no matter how much attention waste, fraud, or abuse receives, it rarely results in ballot box accountability. The more taxpayers don't deliver accountability, the more the political class thinks it can get away with it.
The waste, fraud, and abuse related to the covid pandemic will get worse. Taxpayers’ and voter’s reaction to it must be equally unmistakable. Don’t let them get away with it.
The political class doesn’t fear the voters. It's about time that they did.