White House downplays US Secret Service's $100 billion COVID fraud estimates

The White House has undervalued a statement by the US Secret Service department who claimed that nearly $100 billion has been frauded from COVID relief funds, saying that the amount estimate was based on two old reports. Speaking at a regular press briefing on Wednesday, White House Jen Psaki when asked to shed light on the mammoth figure in question she stated that "there is no new research, data, or analysis of fraud here." Emphasising that the said fraud amount was a result of "just an adding up" of two old reports of precedented challenges involving small business loans and unemployment insurance payments.

"It is also important to note that even those two older analyses combined payments that include mistakes in over and underpayments but it was a reference to two older IG reports," White House Press Secretary Jen Psaki said in a statement, on Wednesday presser.

When further pressed to discuss if the US President Joe Biden administration has ramped up efforts to crack down on this kind of fraud, Psaki highlighted that the government expects "them (Secret Service) to clarify first (as) this was also a concerning headline we saw ourselves." Speaking of specifics, she also explained the "well-known challenges" at small business loans in states getting out UA-UI payments in 2020. "And there has been a lot of reporting, I know from the Associated Press and others about issues with some of those earlier programs," Psaki went on to say.

Nearly $100bn stolen in pandemic relief funds: US Secret Service

Psaki's remarks come hot on the heels of the US Secret Service department claiming that hat nearly $100 billion "at minimum" has been stolen from COVID-19 relief programs set up to facilitate businesses and people who lost their income during the two-year-long pandemic. Speaking to Associated Press on Tuesday, an agency national pandemic fraud recovery coordinator Roy Doston informed that the estimate is based on the cases and data from the Labour Department and Small Business Administration. The cases did not include frauds prosecuted by the Justice Department, he pointed out.

"The sheer size of the pot is enticing to the criminals," Doston added noting that roughly 3% of the $3.4 trillion dispersed amount has been robbed from pandemic benefits. Furthermore, the figure mostly comprises of unemployment fraud, amounting to $87 billion, which were paid "improperly," AP reported.

Meanwhile, on Wednesday, referring to Psaki's statement Secret Service spokesperson Justine Whelan states that the agency is not amending a statement on their website. However, a clarification note was added to explain that the overall figure is based on reports from two credible departments. "There isn't a correction to be made, we just explicitly posted on the release's webpage the same info we discussed yesterday," Whelan wrote in an email to the Associated Press on Wednesday.

The Secret Service has seized more than $1.2 billion while investigating unemployment insurance and loan fraud. Additionally, it has returned more than $2.3 billion of illegally obtained funds by working with financial partners and states to reverse the transaction. As per the agency, more than 900 active criminal investigations into pandemic relief frauds are underway with over 100 related arrests so far.

(With inputs from AP)

(Image: AP)