Economic disaster loans were intended to keep small businesses afloat after crippling financial problems during the pandemic, but by applying for EIDLs, some fraudulent accounts received government loans without much scrutiny, as reported. by BNC News.
Friday morning, the Secret Service — which partnered with the Small Business Administration — announced the recovery of $286 million in COVID-19 relief funds.
Green Dot Bank – a ‘branchless’ online financial institution – was used to disperse fraudulent relief money through debit cards. The bank worked with authorities to uncover 15,325 suspicious accounts and recover millions.
The Small Business Administration will receive the recovered funds.
During the investigation, the majority of accounts were found to have been created using either fully fictitious identities or partially fictitious identities containing stolen information, Deputy Special Agent in Charge Roy Dotson said.
“Modern conveniences and advancements — which we all use — like online banking, third-party payment systems, and cryptocurrencies have enabled fraudsters to accelerate their criminal activities,” Dotson said.
It is also suspected that there are “many perpetrators” inside and outside the United States.
Two years have passed since the Secret Service investigation began in April 2020, and Dodson says it will take much longer to recover all lost and fraudulent funds.
In 2020, the Secret Service estimated that fraudsters stole more than $100 billion in total COVID-19 relief funds.
To date, the Secret Service reports that only $1.4 billion of those funds have been recovered.