As prepared for delivery.
“Good morning and welcome to today’s Oversight Subcommittee hearing on investigating pandemic fraud and preventing history from repeating itself.
“We have all seen the headlines – ‘Biggest fraud in a generation,’ ‘Easy money,’ ‘The Great Grift.’ These terms were used to describe the historic amount of fraud that plagued government assistance programs during the COVID-19 pandemic. It is my hope that today we can dive deeper into how this fraud was carried out and examine the tactics used to steal government benefits. The goal of this hearing is not to cast blame on one side of the aisle or the other. Rather, my hope is this hearing will help us identify corrective actions needed to prevent massive fraud from happening when resources are pushed out in future emergencies.
“There was a sense of urgency to get massive amounts of money out the door and into the pockets of Americans in need. For example, in the first 14 days of the Paycheck Protection Program, the Small Business Administration distributed over $300 billion of loans. The unprecedented amount of spending naturally made benefit programs more susceptible for bad actors. We know that Unemployment Insurance (UI) fraud totaled at least $100 to $135 billion and the IRS has now issued a moratorium for the Employee Retention Tax Credit due to significant fraud concerns.
“There are too many stories of pandemic fraud to recount today, but I’d like to mention a few examples:
“In one instance, the FBI discovered that a Nigerian state government official was in possession of stolen bank, credit card, and tax information of numerous Americans and used their identities to obtain $350,000 worth of UI benefits from seven different states. But he is just one example of scores of foreign fraudsters that used stolen identities to loot aid intended to assist unemployed Americans.
“In another case, a man from Michigan was on parole when he filed dozens of fraudulent UI claims using the identities of federal and state inmates who were not eligible for these benefits. He obtained their personal information from websites on the dark web or from the inmates themselves by falsely claiming he could help improve their credit ratings. This man has since pleaded to both wire fraud and aggravated identity theft.
“And those examples only scratch the surface.
“We must understand how the fraud was committed so we can stay ahead of the criminals and use the most advanced technology available to do so. I am encouraged that the Pandemic Response Accountability Committee formed an initiative run by data scientists to use Artificial Intelligence and risk models to analyze pandemic spending and identify anomalies. This type of data sharing can help law enforcement agencies pursue fraud investigations. It is my hope that using tools like this will not only help hold criminals accountable for their actions in the past, but it will guide our future efforts in Congress.
“We recognize that we can’t prevent all fraud, but it’s important to understand how the fraud was committed so we can implement corrective actions to prevent such massive amounts of fraud from happening again in future emergency situations. Ultimately, every dollar that is prevented from being wasted by fraud is another dollar that can go to someone who truly needs the assistance.