Secret Service: Nearly $100 billion in COVID-19 relief funds stolen

Staff Report

Almost $100 billion at minimum has been stolen from COVID-19 relief programs intended for businesses and people who lost their jobs due to the pandemic, the U.S. Secret Service announced in a news release.

According to an Associated Press report, the estimate is based on Secret Service cases as well as data from the Small Business Administration and the Labor Department. The Secret Service did not include pandemic fraud cases prosecuted by the Justice Department.

Assistant Special Agent in Charge Roy Dotson of the Jacksonville field office will coordinate efforts across multiple ongoing Secret Service investigations into fraudulent applications.

According to the release, fraud related to personal protective equipment, or PPE, was of primary concern to law enforcement early in the pandemic.

The release of federal funding through the Coronavirus Aid, Relief and Economic Security Act, known as CARES, has attracted the attention of organized crime networks around the world as well as individuals.

The exploitation of pandemic-related relief is an investigative priority for the Secret Service and its partners. Dotson will coordinate with financial institutions and money services businesses, United States Attorney Offices, and other federal agencies regarding large-scale seizures of illicitly obtained pandemic relief funds. This includes unemployment insurance (UI), U.S. Small Business Administration (SBA) loan and grant programs, and other benefit programs.

“The Secret Service currently has more than 900 active criminal investigations into fraud specific to pandemic-related relief funds,” stated Dotson. “That’s a combination of pandemic benefits and all the other benefits programs too. Every state has been hit, some harder than others. The Secret Service is hitting the ground running, trying to recover everything we can, including funds stolen from both federal and state programs.”

The Secret Service, through its network of Cyber Fraud Task Forces (CFTF) and in partnership with Federal and State, local, tribal, and territorial partners, as well as foreign law enforcement, academia, and the private sector partners, particularly financial institutions, are addressing the ongoing criminal activity through prevention, mitigation, and investigation.

The Secret Service CFTFs are staffed with special agents, financial, criminal and digital forensics analysts who are all supported by the Global Investigative Operations Center at Secret Service headquarters. As national coordinator, ASAIC Dotson is also spearheading cryptocurrency investigations involving the use of unsuspecting victims as money mules to move stolen funds from one account to another within the cyber arena.

“The Secret Service has seen a huge uptick in electronic crime in furtherance of these fraud cases,” Dotson continued. “Criminals will often ask potential victims to open an account and move money for them for some reason as part of a ruse.” Fraudsters, for example, prey on people by engaging them online as part of a romance scam, phony job opportunity or other scheme, and then asking for financial favors. “Targeted individuals are often asked to open bank accounts and accept large sum deposits,” Dotson said. “As a result, people are becoming unwitting mules for stolen money.”

To date, Secret Service investigations and investigative inquiries into UI and SBA loan fraud have resulted in the seizure of more than $1.2 billion and the return of more than $2.3 billion of fraudulently obtained funds via Automated Clearing House reversals. These investigations have led to the arrest of 100 individuals responsible for UI and SBA loan fraud. The Secret Service continues to work closely with the U.S. Department of Labor and SBA Offices of Inspectors General (OIG), and the Pandemic Response Accountability Committee (PRAC) on identifying and preventing these crimes.

The Secret Service has developed a national network of Cyber Fraud Task Forces for the purpose of preventing, detecting and investigating various forms of electronic crimes. These task forces are supported by the headquarters-based Global Investigative Operations Center with technical infrastructure, strategic guidance and expert knowledge. This unified approach toward preventing cybercrime has enabled the Secret Service to prevent billions in financial loss.