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The Secret Service says that specialized fraud targeting Covid relief funds attacks funds like the Economic Injury Disaster Loan program.
The US Secret Service recently revealed that criminals have stolen approximately $100 billion in Covid relief funds through fraud. According to a Secret Service spokesperson, over $400 million of the recovered funds routed to PayPal and Green Dot Corporation. Recovery resulted from concerted efforts between the federal law enforcement agency and numerous institutions from the private sector. So far, the law enforcement agency put the recovered funds at $2.3 billion.
According to a Secret Service spokesperson:
“After the Secret Service alerted the private sector early on about the emerging fraud, numerous financial institutions proactively identified, investigated, and safeguarded against suspected fraudulent pandemic relief funds. These private institutions then reached out to the Secret Service for further assistance. In coordination with companies like Green Dot Corporation and PayPal, the Secret Service was able to seize over $400 million in fraudulent funds.”
In addition, this has also led to the arrest of more than 100 people connected with the fraud. These fraudsters range from individuals to organized groups who diverted the loot from some federal loan programs. Target programs include the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program, and a third unnamed similar initiative. The total amount of Covid relief funds disbursed since early 2020 now stands at $3.5 trillion.
Secret Service Looks to Stay on Covid Relief Fraud among Other Things
The Secret Service, better-known for its presidential protection role, also effected some internal changes. The agency announced the appointment of Assistant Special Agent in Charge Roy Dotson, to the role of national pandemic fraud recovery coordinator. Dotson’s primary responsibility entails overseeing the Secret Service’s numerous investigations into the large number of fraud cases owing to that theft.
Dotson acknowledged that he had an uphill task ahead of him. As he put it:
“I’ve been in law enforcement for over 29 years and worked some complex fraud investigations for 20 plus years, and I’ve never seen something at this scale.”
He also further stated that the ease with which criminals can pilfer or divert funds nowadays is relatively higher. This is due to the ubiquitous availability of the web and online paraphernalia. However, Dotson explained that the Secret Service currently has more than 900 open pandemic fraud investigations. This enormous number is due to the disparate specialized nature and patterns of fraud cases in view.
As the new national pandemic fraud recovery coordinator, Dotson will also oversee investigations linked to crypto fraud. In most cases here, criminals may cajole victims to transfer funds into crypto wallets that fund illegal schemes. Additionally, some of these victims also misadvisedly open bank accounts which culprits then use for money laundering purposes.
According to reports, fraudsters with working knowledge in tech opened accounts with about four online investment programs earlier this year. These digital accounts, set up with stolen identities, serve as a conduit for the stolen funds.