By Jack Aldane on 08/03/2023 | Updated on 08/03/2023
Photo by Brett Hondow, Pixabay
US president Joe Biden proposed a wide-ranging piece of legislation on 2 March to tackle fraud and help citizens affected by identity theft during the COVID-19 pandemic.
Biden set out three objectives to the plan, which include increasing resources for law enforcement agencies to challenge fraudulent activities, ramping up investment in fraud and identity theft prevention, and extending help to victims of fraud.
US congress would have to approve US$1.6bn in funding to achieve these goals, while the legislation would also increase the statute of limitations for fraud cases in the pandemic unemployment insurance programmes to 10 years.
The proposal comes after the US Government Accountability Office made a conservative estimate that in the 18-month period from April 2020, during the COVID-19 pandemic, the US unemployment system lost at least US$60bn to fraud. Millions of dollars have since been recovered, but watchdog officials have warned that long-term systemic vulnerabilities remain and must be addressed.
Other governments around the world have also struggled with fraud around COVID-19 support schemes. According to estimates from UK government, £4.9bn (US$6.4bn) of business support loans made during the pandemic could be lost to fraud, while the UK’s then Department for Business, Energy and Industrial Strategy concluded in March 2022 that around £17bn (US$22.4bn) could be lost in total, when including money owed by businesses that are unable to repay.
In a statement released alongside Biden’s plan, the White House said that initial pandemic legislation in 2020, along with the 2021 American Rescue Plan, were both “essential to mitigating the health and economic impact” of the pandemic.
However, it added: “There must be a bipartisan response to punish those who engaged in major and systemic fraud against the American people during a time of national emergency [and] to put in place stronger fraud and identity theft prevention going forward, and to hold harmless those Americans who were innocent victims of identity theft.”
Recovering lost funds
If the legislation is passed into law, the legislation would provide US$300m of funding for the US Department of Justice in order to triple the country’s number of COVID-19 Strike Force Teams. There are currently three such teams, each of which is tasked with stopping criminal syndicates and fraudulent actors.
The White House said that these strike force teams “have been highly effective and must be expanded to recover more stolen taxpayer dollars”. One team was said in the statement to have seized and recovered “US$286m in stolen pandemic relief funds”.
Another US$300m of the proposed funding would go towards supporting investigative staff on the Pandemic Response Accountability Committee (PRAC) – a council made up of more than 20 inspectors general (IG) from across the federal government – as well as select IG offices tasked with working on COVID fraud. Under-resourced IGs at the Energy and Agriculture departments and the Environmental Protection Agency would also receive support.
As requested by watchdogs during a hearing in February, the Biden administration would also create a permanent data analytics platform similar to that previously set up by PRAC. PRAC had previously managed to identify 69,323 questionable social security numbers (SSNs) used to obtain US$5.4bn from the country’s Small Business Administration’s COVID-19 Economic Injury Disaster Loan programme and the Paycheck Protection Program.
Under the new legislation, PRAC would also be involved in “gold standard” meetings between government agency and White House staff. These meetings were created by the Biden administration with PRAC to achieve “a more cooperative and early prevention model for fraud prevention and programme integrity”.
A draft executive order, details of which were revealed earlier this month, meanwhile showed that the US government could scale up its identity verification and authentication service to cover the whole country in a bid to protect citizen identity from theft and fraudulence.
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