No one seems to be able to agree on just how much covid-relief fraud has occurred, but everyone agrees that it indeed has occurred and that any amount of money that was earmarked to help during a pandemic is unacceptable.
The estimates vary widely and range from $40 billion to $200 billion. (What a range! But what's $160 billion between friends?) It's a scenario that should raise questions not only about why our federal government isn't better at preventing such criminal activity from happening, but also about who we are as a people that so many would try to get away with it.
It would be one thing if a few criminals defrauded the system in a way that made them rich but went largely unnoticed. It's quite another that this many people apparently gamed the system.
The Associated Press reports that the fraud estimate for the Covid-19 Economic Injury Disaster Loan program amounts to a whopping 33 percent of the total funds available. While some make the case that these numbers unintentionally mislead the public into thinking this is a bigger deal than it is, then call us misled. This is a bigger deal than they think it is on several levels.
Hannibal "Mike" Ware is the inspector general of the Small Business Administration and has a backlog of 90,000--count 'em, 90,000--"actionable leads into pandemic relief fraud, which amounts to nearly a century's worth of work," sitting on his desk. That is astounding.
This was not just about incompetent fraud prevention. It was not just about an abuse of generous relief paid for by taxpayers and raided by other taxpayers. We the People are left holding the bag, and this thing has more far-reaching impacts.
John Griffin, a finance professor at the University of Texas McCombs School of Business, and his colleagues said in a new paper that "... pandemic relief fraud inflated house prices."
Oh, do go on.
"The study found that people who fraudulently obtained Paycheck Protection loans were more likely to buy a house than people who got legitimate loans, and housing prices increased 5.7 percentage points on average in ZIP codes with high amounts of fraud during the pandemic, even after controlling for other factors that affect home prices such as land supply, prior house price growth and the ability to telework."
The study also found that consumer spending increased in ZIP codes where fraud was more prevalent. They even go so far as to claim it may have fueled inflation, although we might counter that the world has been in a period of global inflation brought on by many factors including oil prices, the war in Ukraine, etc.
That notwithstanding, the increase in housing prices is enough to make you want to find these fraudsters. And give them a good stern lecture. And jail time.