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White House launches $1.6 billion plan against Covid aid fraud


Mar 2, 2023

The White House on Thursday laid out its plan to attack pandemic scammers and recover stolen relief funds distributed under the Trump and Biden administrations.

A senior White House official said the goal was to provide $600 million to investigate and prosecute systemic pandemic fraud, a similar amount to bolster fraud prevention and $400 million to help victims of identity theft.

«The president wanted to make sure that we had a special and concerted effort to prosecute and punish the worst offenders of pandemic fraud,» Gene Sperling, who oversees the implementation of the White House’s American Rescue Plan, said on a call with reporters who They anticipated the proposal.

While at least $2 billion has been recovered so far, according to data from the Government Accountability Office, some experts have estimated that the Covid relief fraud could be more than a quarter of a trillion dollars. The Trump and Biden administrations doled out about $5 trillion in Covid relief funds.

Sperling said he will be on Capitol Hill speaking with key lawmakers on Thursday about the proposal, adding that it will form part of the president’s budget, which is expected to be sent to Congress next week amid rising tensions with Republicans over the cap. Of the debt.

Sperling, however, struck an optimistic tone about winning over Republicans to secure bipartisan support for the proposal.

“I think they will see this as a real savings,” Sperling told reporters. «It’s about increasing our [inspector generals’] and the ability of law enforcement to save taxpayers money.”

He also said that he believes the proposal will end up paying for itself with the recovered funds.

House Oversight and Accountability Committee Chairman James Comer, a Kentucky Republican, said his panel will launch investigations into hundreds of billions of taxpayer dollars lost to fraud when Covid relief funds were distributed .

“Right now, I don’t have confidence in the federal government’s ability to prevent fraud,” Comer said.

The White House is asking to increase the statute of limitations to 10 years for cases of serious and systemic pandemic fraud.

In a summary of its proposal, the White House said: «In the absence of additional resources, the oversight community would not be able to investigate and prosecute known cases before the statute of limitations expires and pursue sophisticated cases that will require more time and resources.» .

Sperling said: “It takes time to go after the most sophisticated people. We want to not just capture them, get their funds. We want to send them the signal that they can run but they can’t hide.»

Under the proposal, the Small Business Administration and Department of Labor watchdogs would each receive at least $100 million for long-term hiring of investigators to pursue organized pandemic fraud cases and to support prosecutor-led efforts. head of pandemic fraud for the Department of Justice.

Haywood Talcove, executive director for government at LexisNexis Risk Solutions, which contracts with states and the federal government to prevent pandemic fraud, said he is «very excited» about the White House proposal.

“Focusing on inter-agency and state-to-state data sharing while improving front-end identity protection will improve the experience for those using government services and reduce the amount of time law enforcement spends investigating these crimes,” Talcove said. in a statement to NBC News.

Blake Hall, CEO of ID.me, which also works with states and the federal government on pandemic fraud prevention and identity verification, called the White House proposal a «huge step forward» in addressing a » national security problem.»

“We are pleased to see large investments in investigative and fraud activities to hold criminals accountable,” Hall said in a statement to NBC News. «Given the involvement of nation-state sponsored actors attacking benefit programs, pandemic fraud is a national security issue. We believe the answer to such pandemic-era fraud is self-evident.»

Since the pandemic began, 1,044 people have pleaded guilty or been convicted of defrauding federal covid relief programs, according to the Government Accountability Office. An additional 609 have been claimed.

sarah fitzpatrick, Elyse Perlmutter-Gumbiner and summer conception contributed.