Thieves Stole Billions Of The Stimulus Bail-Out Money

The stimulus money was supposed to help small businesses in this country survive the recession due to the Coronavirus. Sadly, it didn't work out that way.

Thanks to the incompetence of the Trump administration's overseeing of the distribution of those funds, billions of dollars went to thieves who made fraudulent requests -- and because of that, many small businesses were unable to get any money.

Here's how Bloomberg.com describes what happened:

For a few months this year, a U.S. government aid program meant for struggling small-business owners was handing out $10,000 to just about anyone who asked. All it took was a five-minute online application. You just had to say you owned a business with at least 10 employees, and the grant usually arrived within a few days. 

People caught on fast. In some neighborhoods in Chicago and Miami, it seemed like everyone made a bogus application to the Small Business Administration’s Covid-19 Economic Injury Disaster Loan program. Professional thieves from Russia to Nigeria cashed in. Low-level employees at the agency watched helplessly as misspent money flew out the door.

Even after the $20 billion in funding for grants dried up in July, the fraud continued, as scammers looted a separate $192 billion pot of money set aside for loans. “I’ve never seen anything like it,” said an SBA customer-service representative who spoke on the condition of anonymity to protect her job. “I don’t think they had any processes in place. They just sent the money out.”

This account of the disaster-aid program is based on interviews with frontline SBA workers and outside fraud investigators, and on a review of thousands of social-media postings. The unprecedented scale and urgency of the pandemic response made some missteps inevitable, and lawmakers explicitly ordered the agency to prioritize speed over thrift. But decisions by agency leaders contributed to the chaos.

The SBA’s much-vaunted new computer system, built by an outside contractor for $750 million, proved blind to certain types of fraud and sometimes awarded grants even when it spotted disqualifying features. The agency pressured loan officers with little training to churn through applications quickly, while making it difficult for them to detect or report suspicious ones. When officials eventually tightened fraud controls, the result was often delays and rejections for legitimate applicants.

The amount stolen from the program, if it’s ever tallied, will almost certainly be measured in the billions of dollars. But that’s only part of the cost. Many legitimate applicants were denied grants because scammers got the money first. And identity thieves pocketing loan proceeds left an unknown number of Americans saddled with bogus debts.