Federal agencies recklessly distributed nearly $80 billion in pandemic funds to fraudsters who used stolen or invalid Social Security numbers, a glaring oversight that could have been prevented with basic verification procedures.
Key Takeaways
- The Pandemic Response Accountability Committee identified 1.4 to 1.5 million potentially fraudulent applications that received approximately $79 billion in pandemic relief funds.
- Economic Injury Disaster Loans accounted for $55.8 billion of the fraud, while the Paycheck Protection Program lost $13.8 billion and unemployment programs lost $9.8 billion.
- Basic identity verification steps, such as cross-referencing Social Security numbers with birth dates, were abandoned in the rush to distribute funds.
- Nearly 12,000 applications used Social Security numbers belonging to deceased individuals, highlighting the extent of the fraud.
- The PRAC recommends implementing a Social Security number verification system for future emergency programs.
Billions Lost Due to Rushed Pandemic Response
A scathing review by the Pandemic Response Accountability Committee (PRAC) has revealed that federal agencies disbursed nearly $80 billion in COVID-19 relief funds to applications with stolen or invalid Social Security numbers. This massive fraud occurred across three major pandemic assistance programs: the Small Business Administration’s Economic Injury Disaster Loan program, the Paycheck Protection Program, and Department of Labor unemployment insurance initiatives. The investigation uncovered 1.4 to 1.5 million potentially fraudulent applications that received taxpayer funds meant for struggling Americans during the crisis.
“When program guardrails were removed during the pandemic, a substantial amount of funds were rapidly disbursed without proper identity verification,” stated the PRAC in their report.
The Trump administration and Congress approved a massive $5 trillion bailout package during the pandemic, resulting in a rush to distribute funds that created vulnerabilities to fraud. The investigation determined that a significant portion of this money ended up in the hands of criminals who exploited the lack of basic verification systems. The breakdown of estimated fraud is staggering: $55.8 billion in Economic Injury Disaster Loans, $13.8 billion in the Paycheck Protection Program, and $9.8 billion in unemployment payments.
Verification Failures Exposed Taxpayer Funds
The PRAC’s investigation revealed that simple verification steps could have prevented much of the fraud. The committee reviewed a sample of 662,000 applications and found 24,000 inconsistencies with Social Security Administration records. These discrepancies included invalid Social Security numbers, incorrect birth dates, and wrong names associated with the numbers. Perhaps most alarming, nearly 12,000 applications used Social Security numbers belonging to deceased individuals, though these were not included in the final fraud estimate.
“Implementing pre-award verification helps streamline the vetting process before disbursal, preventing fraudulent payments from going out and ensuring that funds are disbursed with additional program integrity controls,” the PRAC explained in their recommendations.
The Paycheck Protection Program was particularly vulnerable because it did not require applicants to provide their birth dates, making it impossible to fully verify identities. The PRAC noted that this limitation likely resulted in an undercount of fraud within that program. This glaring oversight exemplifies how basic security measures were abandoned in the rush to distribute funds, creating an open invitation for fraudsters to exploit the system.
Solutions and Accountability Moving Forward
In response to these findings, the PRAC has recommended implementing a Social Security number verification system for future emergency programs. This would require federal agencies to work directly with the Social Security Administration to verify applicants’ identities before distributing funds. The committee emphasized that such preventative measures are essential to protect taxpayer dollars and ensure that assistance reaches legitimate recipients during times of crisis.
“Our oversight work during the past five years has detailed federal agencies’ inability to use data to effectively prevent pandemic-related fraud. By contrast, the PRAC’s sophisticated data analytics capabilities allow us to look across federal agencies and programs to identify potential fraud before it occurs by comparing agency and other data with applicant-provided information, such as IP addresses, dates of birth, bank accounts, and home addresses. As today’s report demonstrates, this data analytics capability can strengthen program integrity and prevent billions of dollars in fraud, ensuring taxpayer funds are paid to legitimate applicants,” stated PRAC Chairman Michael Horowitz.
Some Republican lawmakers are advocating for legislation to extend the statute of limitations for prosecuting COVID-19 aid fraudsters, highlighting the need for accountability. The full extent of pandemic aid fraud remains unknown, with previous audits estimating improper or fraudulent payments across these programs at a staggering $400 billion. This latest revelation of $79 billion in payments to fraudulent Social Security numbers may only be scratching the surface of the total abuse of taxpayer funds during the pandemic.
Randon sampling of CV19 Aid Money or 662K of 67.5 million claims Over 24K used fraudulent or stolen @SocialSecurity numbers to steal 10s of billions from the Treasury.
MY OPINION FROM EXPERIENCE – Most of the stolen money extracted by criminals was aided by collusive insiders…
— Miranda C. Bell Reporting NMS15a Felony Crimes (@truthsearch1957) June 7, 2025
Preventing Future Fraud
The PRAC has made specific recommendations to prevent similar fraud in future emergency situations. Federal agencies should require applicants to include dates of birth on all applications and work directly with the Social Security Administration for identity verification. Had these basic steps been followed during the pandemic, billions in taxpayer dollars could have been saved from falling into the hands of criminals who exploited the system’s weaknesses.
“Had the SBA required PPP applicants provide DOB information in the PPP application, as COVID-19 EIDL and Pandemic UI programs did, we would expect to have identified even more potentially stolen or invalid SSNs, as well as higher potentially fraudulent payment amounts in our PPP estimates, because there would have been one more data point (i.e., DOB) to check against SSA’s records,” noted the PRAC in their report.
This massive oversight in pandemic relief distribution serves as a stark reminder of the importance of implementing proper verification systems before disbursing taxpayer funds. While the urgency of the pandemic created pressure to distribute relief quickly, basic security measures should never have been abandoned. As President Trump works to restore fiscal responsibility to government operations, lessons from this costly mistake must inform future emergency response efforts to ensure that American taxpayer dollars reach their intended recipients.
