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A report released Tuesday from the Office of Inspector General of the Small Business Administration found that the federal government lost more than $200 billion in COVID relief funds to potential fraud, waste, and abuse.
The OIG's latest estimate is significantly higher than previous projections that speculated approximately $100 billion.
The relief initiatives included the Paycheck Protection and COVID-19 Economic Injury Disaster Loan programs, created to provide emergency financial relief to small businesses and those who lost their jobs due to restrictive lockdown measures.
The report estimated that at least 17% of the relief funds, which totaled approximately $1.2 trillion, were disbursed to potential fraudsters, including "more than $136 billion COVID-19 EIDLs and $64 billion in PPP funds."
Inspector General Hannibal "Mike" Ware noted that the OIG's investigation into the potentially stolen funds has, so far, resulted in 1,011 indictments, 803 arrests, and 529 convictions. Approximately $30 billion in fraudulently obtained relief funds have been seized and returned to the SBA.
Ware previously predicted during a 2021 interview with ABC News, "In terms of the monetary value, the amount of fraud in these COVID relief programs is going to be larger than any government program that came before it."
The report claimed that the extensive fraud resulted from the SBA's "weakened or removed" controls to allow swift distribution of emergency funds to those in need.
The OIG reported that the eased review process had the "allure of 'easy money'" for fraudsters who saw an opportunity to exploit the SBA's lowered barriers.
"OIG is working on tens of thousands of investigative leads on alleged fraud, waste, and abuse of taxpayer resources. Thousands of investigations will ensue for years to come because of swift congressional action to increase the statute of limitations to 10 years for COVID-19 EIDL and PPP fraud. We continue to identify fraud schemes, and we anticipate the overall potential fraud estimate could fluctuate; therefore, we may issue periodic updates to this report," the OIG's report stated.
Bailey DeVries, acting associate administrator of the SBA, expressed concern that Ware's report contained "serious flaws that significantly overestimate fraud."
DeVries also claimed that the report could "unintentionally mislead the public to believe that the work we did together had no significant impact in protecting against fraud."
She deflected some blame on "the prior administration" for prioritizing speed, which "unnecessarily deflated the control environment for PPP and COVID-EIDL for the first several months of the programs."
DeVries stated that approximately 86% of the fraud occurred within the first nine months of the relief programs' rollouts, arguing that the agency's controls to prevent fraud improved over time.
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Candace Hathaway is a staff writer for Blaze News.