US Secret Service identifies 15,000 fraudulent bank accounts and seizes $286 million in stolen COVID relief loans

The U.S. Secret Service seized approximately $286 million in stolen Economic Injury Disaster Loans, the organization announced today. The fraudulently obtained funds were returned to the Small Business Administration.

The Secret Service identified 15,000 accounts used to apply for COVID relief loans using stolen employment and personal information.

Green Dot Bank, a third-party payment system, was utilized by criminals to move funds to avoid detection. The Orlando, Florida, Secret Service Field Office initiated the investigation and worked with GDB to identify the accounts and stolen money.

Lead investigator for the Secret Service and Assistant Special Agent in Charge Roy Dotson said, “Working closely with our Central and North Florida Cyber Fraud Task Forces, this investigation enabled the recovery of a significant amount of critical federal relief.”

Assistant Director David Smith of the Secret Service announced, “By aiding in the return of nearly $2.3 billion in stolen funds over the last 30 months, our workforce has demonstrated a clear and firm commitment to the vitality of American businesses across the country.”

The Associated Press reported that billions had been fraudulently claimed from the Paycheck Protection Program loans, unemployment insurance, and other COVID relief programs.

Justice Department inspector general Michael Horowitz called the PPP loan program “an invitation” to fraudsters during an “NBC Nightly News” interview in March. He stated, “What didn’t happen was even minimal checks to make sure that the money was getting to the right people at the right time.”

The Secret Service is responsible for launching 3,850 COVID-related fraud investigations that have resulted in the recovery of over $1.4 billion in fraudulently obtained funds. The Secret Service also assisted in returning another $2.3 billion to state unemployment insurance programs.

The Government Accountability Office reported in March that additional measures were necessary to reduce emergency relief fraud in the future. It stated, “Many agencies were able to distribute funds quickly, but the tradeoff was that they did not have systems in place to prevent and identify payment errors and fraud.”

Department of Justice director for COVID-19 fraud enforcement Kevin Chambers said, “This is an important step in returning stolen funds to the American people. This forfeiture effort and those to come are a direct and necessary response to the unprecedented size and scope of pandemic relief fraud.”

The GAO provided 271 recommendations to avoid fraud in the future, including initiating a new program for payment reporting, requiring that agencies provide annual fraud reporting, and establishing a permanent fraud analytics center.