Feds Paid $38 Million in Pandemic Aid to 3,200 Dead People, Inspectors General Find

Department of Justice Inspector General Michael Horowitz addresses a Congressional panel in February 2023. Anna Moneymaker/Getty Images

About $38 million in federal pandemic assistance was issued to Social Security numbers belonging to more than 3,000 dead people in 2020 and 2021, a U.S. Inspector General team empaneled to probe fraud reported on May 11.

The disclosure was posted by the Pandemic Response Accountability Committee (PRAC) in a follow-up to a February report that determined 69,000 “questionable” Social Security numbers were used to obtain $5.4 billion in COVID-19 loans and grants from the Small Business Administration (SBA) and through the Paycheck Protection Program (PPP).

In a February appearance before the House Oversight and Accountability Committee, U.S. Inspector General Michael Horowitz estimated about $400 billion in COVID-19 assistance was issued fraudulently and testified that between $163 billion to $191 billion is related to the pandemic Unemployment Insurance (UI) program.

The revelation prompted Chair Rep. James Comer (R-Ky.) to say what PRAC and other oversight agencies are uncovering amounts to “the greatest theft of American tax dollars in history.”

PRAC was created within the Office of Inspector General (OIG) in spring 2020 to track allocations from the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act.

With the subsequent adoption of additional federal COVID-19 relief and stimulus packages, including the March 2021 American Rescue Plan Act (ARPA), PRAC’s 22 inspector generals are tracking more than $7.1 trillion in federal pandemic allocations on its webpage, which is accessible to the public.

In February, the Pandemic Response Accountability Committee (PRAC) identified nearly 70,000 "suspect" Social Security numbers were used to receive up to $5.4 billion in fraudulent payments and in a May 11 said at least 3,100 of those numbers belonged to dead people. Courtesy Pandemic Response Accountability Committee

In its May 11 update, PRAC said of 69,000 “questionable” loans and grants cited in its February report, the Social Security Administration verified 20,404 of those numbers belonged to “deceased individuals.”

Using the Treasury Department’s “Do Not Pay” (DNP) system, the dates of death for 15,307 of the 20,404 Social Security were verified with 3,222 of those deceased individuals’ Social Security numbers being used to secure pandemic assistance from the SBA and PPP.

“PRAC data scientists determined that funds were disbursed in connection with applications using 305 of the 3,222 SSNs [Social Security numbers], totaling nearly $38 million in potential,” the committee said in an accompanying statement.

In analyzing the 3,222 suspect loan applications, PRAC found they were either filed after the number owner’s date of death, “indicating potential identity fraud,” or both before and after the owner’s date of death, “another indication of potential identity fraud or misuse.”

Also in the mix were SBA and PPP applications filed “before the Social Security number owner’s date of death, but … paid after the date of death.”

“We dug deeper into our findings, comparing 20,404 deceased individuals’ SSNs used on applications with Treasury’s Do Not Pay list. We got the dates of death for 15,307 of those—and 3,109 are likely instances of identity fraud,” the committee said in a May 11 tweet with a slightly lower number of dead people who got paid than the 3,222 cited in its update.

PRAC Seeks $1.6 Billion

In March, the Biden administration requested $1.6 billion to help PRAC and DOJ track down and recover fraudulently distributed COVID-19 pandemic relief and asked Congress to extend prosecution deadlines.

The Biden administration has earmarked $600 million of that $1.6 billion to form at least 10 DOJ task forces to prosecute pandemic fraud. Right now, there are three pandemic fraud DOJ task forces.

During a February hearing before the House Ways and Means Committee, Department of Labor Inspector General Larry Turner said his staff will be investigating pandemic-related fraud through at least September 2026 “when the statute of limitations for most pandemic-related violations will have expired.”

In addition to requesting an extension on the statute of limitations from five to 10 years, PRAC has called on Congress to raise the jurisdictional limit for recoveries of “smaller” false or fraudulent claims from $150,000 to $1 million.

There were least 1 million pandemic awards between $150,000 and $1 million totaling about $362 billion, according to PRAC.

The House Ways and Means Committee on Feb. 28 complied with PRAC’s request, advancing a bill that provides states with new incentives to go after fraud and extending the federal statute of limitations on prosecution of such crimes.

Chair Rep. Jason Smith (R-Mo.) proposed “Protecting Taxpayers and Victims of Unemployment Fraud Act” maintains, “Unemployment fraud is not a victimless crime” and should be aggressively prosecuted.

The proposal extends the federal statute of limitations for criminal charges filed in connection with UI fraud cases from the present five years to 10 years.

Horowitz said in a statement accompanying PRAC’s May 11 update that the pandemic fraud probe has honed investigatory skills, clarified oversight procedures, and confirmed the “benefits of agencies using the Department of Treasury’s Do Not Pay (DNP) system to prevent and detect fraud.”

“Improved data sharing will enable agencies to properly screen applicants for benefit programs to ensure funding goes to the individuals they were intended to help,” Horowitz said.

“In many cases, agencies initially relied on self-certification to verify an applicant’s eligibility for pandemic relief. Now, we’re chasing billions of dollars that got into the wrong hands.”