Robbed Blind
Feds must recover COVID aid stolen by foreigners
AS COVID-19 swept across the country, destroying jobs and devastating lives, Washington acted swiftly to unleash a record $794 billion in unemployment benefits. But Americans trying to feed their families and keep their businesses open were not the only beneficiaries of this unprecedented flood of cash.
Experts believe that fraudsters stole at least half of this money — and nearly three-quarters of that ended up in the hands of dangerous foreign crime syndicates operating alongside China and other corrupt regimes.
The delivery of billions of taxpayer dollars intended to help vulnerable Americans into the hands of overseas criminal groups isn’t just a moral outrage. It enhances their ability to spread crime and corruption worldwide, directly threatening US national security. Washington must act decisively to recover the stolen funds — and deliver justice to those responsible.
Pre-pandemic, US unemployment benefits had never been a particularly attractive target for foreign scammers. The relatively small amounts of money involved, bureaucratic hurdles and risk of exposure to US law enforcement generally made it not worth the effort.
But the dispersal of such colossal sums, especially without any of the oversight mechanisms usually associated with large spending programs, suddenly rendered industrial-scale unemployment fraud a viable and lucrative prospect.
States’ antiquated systems for administering benefits securely left them unable to detect rampant identity theft, while the rushed embrace of riskier platforms, like online-payment apps and prepaid-debit cards, made things even easier. As one official put it, “The system was the victim of what is one of the largest Internet crimes in history, perpetrated against all 50 states at extraordinary levels.”
It gets worse. The crooks involved weren’t just opportunistic scammers but often sophisticated transnational criminal organizations with links to China, Russia and other dangerous US adversaries. In these countries, corruption is so bad that the lines between
politics, business and organized crime aren’t so much blurred as nonexistent. Crime lords operate with impunity under the protection of officials who are either on their payroll or happily turn a blind eye to illicit activities that harm America.
Longstanding examples include Russia’s Kremlin-backed cybercriminals and Chinese authorities’ continued failure to fully crack down on the fentanyl producers fueling the US opioid crisis.
How can the US government proceed against such adversaries?
The first step is obviously to staunch the flow. Some leakage was inevitable in the scramble to prop up the economy, and fraud levels will naturally abate as emergency assistance ebbs. But with time and the benefit of hindsight, state governments must strengthen their systems to ensure this never happens again.
Recovering what’s been stolen will be more difficult and in many cases impossible. But the Biden administration can begin by demanding that China, Russia, Nigeria and other major fraud centers investigate these groups and return stolen funds urgently. They won’t, either because they are part of the problem or lack capacity to do so. That means the United States itself needs to take action.
The recent interagency COVID-19 Fraud Enforcement Task Force is a good start. But crossborder financial-crime investigations are complex and require significantly more resources than domestic cases.
The wheels of justice may turn slowly, but the administration can act swiftly to impose costs on those responsible by sanctioning transnational criminal organizations found to be involved and any public officials who give them cover. This won’t get the money back — but in addition to naming and shaming, it will lock them out of the global economy by preventing them from using US dollars.
If the Biden team proves unwilling to pursue this confrontational path for fear of upsetting Beijing or the Kremlin — a realistic worry given its history of pulling punches on issues like Nord Stream 2 and the COVIDorigins investigation — Congress should harness growing bipartisan outrage to pass legislation forcing the imposition of mandatory sanctions.
It should also expedite the expanding package of bipartisan anti-corruption initiatives designed to help US law enforcement target the tax havens, shell companies and other loopholes through which all this stolen money will inevitably be laundered.
These gangsters treated America just like the kleptocracies they call home, plundering hundreds of billions of dollars in public funds that were supposed to assist Americans in their hour of need. Now it’s time to make them pay the price — and show the world that the American people will not stand for being bilked.