An estimated $79 billion in pandemic relief payments were potentially fraudulent and involved stolen Social Security numbers, but the total could be even higher, according to an inspector general report.

This number is merely a drop in the bucket when it comes to the overall amount of fraud within pandemic relief programs — and if stronger systems had been in place, experts say, it could have been prevented.

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The Pandemic Response Accountability Committee, an oversight group established by the Coronavirus Aid, Relief, and Economic Security Act of 2020, conducted an investigation to find potential fraud, waste, or abuse in programs meant to support those struggling during the pandemic. The committee’s executive director, Kenneth Dieffenbach, says its goal is to “improve program integrity” and prevent fraudulent payments from going out in the first place.

“We strive to contribute to the conversation on fraud prevention by testifying to Congress, making information available to the public, and bringing together insights and recommendations from the oversight community,” he said.

Across all agencies and programs, a total of $4.5 trillion was paid out in relief awards during the pandemic, according to USA Spending.

The June report estimates that some 1.4 million total Social Security numbers from loan applications were potentially stolen or invalid. Because of these numbers, an estimated $79 billion was fraudulently released to loan applicants across different relief programs: The Small Business Administration’s Paycheck Protection Program and Economic Injury Disaster Loan Program, and the Department of Labor’s pandemic-related Unemployment Insurance programs. 

The Paycheck Protection Program had the highest estimated fraud valued at more than $55 billion, according to the report. 

How the committee conducted its investigation

To make its estimates, the committee had a sample of 662,000 identity records from 67.5 million funded loan applications verified by the Social Security Administration, which is responsible for issuing SSNs. 

For each record, the committee asked the administration a few questions: whether the number was valid; if so, whether the name and date of birth listed on the application matched agency records; and whether the number listed on the application belonged to someone who died.

Nearly 24,000 records had questionable SSNs, but that doesn’t include the more than 11,000 records associated with people who died — the committee couldn’t verify if those people were already dead when they submitted their applications. Problematic numbers were flagged if they were never issued by the administration, or the name or date of birth listed with the number didn’t match the administration’s records.

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William Gilmore, Deputy Chief of Economic Crimes for the U.S. Attorney’s Office for the Eastern District of North Carolina, says by taking advantage of these programs, fraudsters make funds unavailable for any potential recipients who really need them.

“Each of these programs, whether you’re talking about PPP, EIDL, unemployment, or housing, all of them were like limited baskets of money that was set aside to help the people that actually needed it,” he told the Washington Examiner. “Every one of those funds was exhausted completely and then not available to people in the future. And so every dollar that went out to somebody that shouldn’t have gotten it, was a dollar that was stolen from somebody that probably could have used it.” 

How the fraudsters did it — and the systems that let it happen

Eighty-seven percent of the PPP records sampled by the committee had no date of birth information, according to the report. The application itself didn’t ask applicants to list a date of birth, a data point required on many other kinds of government forms. 

The date of birth information the committee did receive for applicants was obtained by the lenders, Dieffenbach said. Lenders may include it in the loan submission to the Small Business Administration, according to the report.

If a birthdate had been required, the committee says it would’ve expected to find even more potentially stolen or invalid SSNs, because it would’ve been one more data point to check against administration records, according to the report.

For UI programs, the exponential increase in claims after the first few weeks of the pandemic completely overwhelmed state systems. There were 282,000 unemployment claims on March 14, 2020, which grew to 10 times pre-pandemic numbers after two to three weeks — “far higher than state systems were designed to handle,” according to congressional testimony from the Department of Labor Office of Inspector General in 2023. 

The department received more than 57 million claims within the next five months, the largest increase they’ve seen since 1967.

With so many claims pouring in, processing and verifying them became difficult. State workforce agencies experienced low staffing, and issues with older IT systems made “improper payments” more likely in unemployment programs, said Dieffenbach.

Before the pandemic, verification for unemployment programs followed these steps: submit application, staff review the application and any supporting documents, staff follow up with claimant and/or their employer for additional information if needed, and then the claim is approved, according to a PRAC report from 2024.

The verification process for claims in pandemic unemployment programs was much less thorough. The steps? Submit the application — and then the claim was approved.

Earlier in the pandemic, some agencies’ reliance on self-certification when disbursing funds for PPP and EIDL also played a role. The lack of program controls led to what Dieffenbach dubbed “pay-and-chase.”

‘We’re just scratching the surface’

One case of fraud specific to the PPP comes from Colorado, where a man, Richard Nieto, was sentenced in June to 46 months in federal prison for acquiring more than $900,000 from two fraudulent program loans. Even though this money was meant for business expenses, Nieto spent it on personal expenses, putting it toward a home mortgage, purchasing bitcoin, and investing in a friend’s startup business, among other things. 

There’s also a case from Georgia, where Carl Delano Torjagbo fraudulently acquired a $9.6 million PPP loan and $3.4 million from a fraudulent IRS tax refund, using the funds to pay for luxury cars such as a Lamborghini, BMW, and Range Rover, as well as a yacht and a house, among other items.

Two women from North Carolina took advantage of both the PPP and EIDL programs. Loretta Clarice James was sentenced to eight years in prison this past May for her role in a scheme that led to the fraudulent disbursement of more than $1.5 million in COVID-19 relief loans. One of her accomplices, Lakesha Bowles, was sentenced to 30 months in prison this past April. While it’s unclear how they used the fraudulent funds, both women were ordered to pay more than $1 million in restitution. 

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There have also been documented instances of fraud in states like Virginia, California, Texas, and more. As of March 26, 2025, the Internal Revenue Service Criminal Investigation has opened more than 2,000 tax and money laundering cases related to pandemic fraud, according to an IRS press release. 

Given the widespread pandemic-era fraud, Republicans in Congress are fighting to extend the statute of limitations for prosecuting it. Most notably, they introduced the Pandemic Unemployment Fraud Enforcement Act, which was introduced this past February and passed the House in March. If it becomes law, it would extend the statute of limitations for prosecuting pandemic fraud from five to 10 years.

House Ways and Means Committee Chairman Jason Smith (R-MO) argues the legislation is a “must-pass bill.”

“If we don’t extend it, the criminals who stole money from the pockets of taxpayers – and continue to do so to this day – will get away,” he said during a House floor debate in March.

Former acting U.S. Attorney for the Eastern District of North Carolina, Daniel P. Bubar, says they’ve seen hundreds of these cases already.

“In some ways, we feel like we’re just scratching the surface with the breadth of this amount of fraud,” he told the Washington Examiner.

Planning for the future

One way officials are trying to deter future fraud is by communicating to the public that these crimes will not be tolerated, via media outlets and press releases, said Bubar. Gilmore agrees, saying the focus is now on other kinds of programs.

“We’re not trying to deter future COVID fraud at this point, but we are trying to send the message that for the future, whatever program it is, there’s going to be a consequence if you lie to get the money,” said Gilmore.

Defendants can easily receive jail sentences of several years for these crimes, even without a significant criminal history, said Bubar.

“It’s not unusual in the economic crime space, a lot of people that we prosecute don’t have a criminal history,” he said.

As far as other mechanisms of deterrence, there are oversight groups such as the PRAC, but it’s set to expire on Sept. 30. Lawmakers introduced the Government Spending Oversight Act of 2024, which would’ve retained the committee and even expanded its authority, but the legislation never passed.

PRAC Chair Michael E. Horowitz says the committee could be useful when faced with the next crisis. 

“Sustaining and expanding the PRAC’s data analytics center would save taxpayers millions, if not billions of dollars, by eliminating the need to recreate a data analytics center in response to the next crisis and continuing the critical work of preventing fraud and improper payments,” he said in a PRAC fact sheet.

Jessica Tillipman, the Associate Dean for Government Procurement Law Studies at George Washington University Law School, says the continued work of Inspectors General who investigate waste, fraud, and abuse is also crucial.

“IGs are critical, I can’t stress enough, a critical function of the government,” she told the Washington Examiner. “They’re supposed to be independent, and honestly, people in the agencies don’t love it, right? It’s always somebody over your shoulder checking your work, right? But they’re so important. Their independence is so important.”

The PRAC urges agencies to adopt SSN verification agreements to help combat fraud, should we face another crisis like COVID-19 in the future. These agreements would allow agencies to verify basic information with the Social Security Administration before any program funds are disbursed to applicants, but it can take a while for these agreements to be made due to the sensitive nature of sharing personal information, according to the report.

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This is why Dieffenbach says agencies should start setting up safeguards like this now, instead of waiting for the next natural disaster.

“The time to act is now — the federal government must apply and build on the lessons learned from our pandemic oversight to ensure federal funding goes to those it’s intended to help and better protect taxpayer dollars from fraud, waste, and abuse,” said Dieffenbach. “Understanding how we prepare for future emergencies and safeguard federal spending is more important than ever to protect American livelihoods.”