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A Pandemic "Fraud" Figure Can Mean a Conviction, an Estimate or an Agency Mistake

The Small Business Administration's inspector general put potentially fraudulent PPP and COVID disaster-loan money at more than $200 billion. The Government Accountability Office put pandemic unemployment-insurance fraud at $100 billion to $135 billion. Both are estimates.

Pandemic Darlings · Published

In pandemic-relief reports and court records, "fraud" can mean a criminal conviction, an indictment, a civil settlement with no admission, an agency estimate, an improper payment or a flag from a risk model.

The word can cover a thief, a mistake, a weak safeguard, a duplicate payment, a suspicious pattern or a proven loss.

The SBA inspector general's 2023 report estimated more than $200 billion in potentially fraudulent PPP and COVID-EIDL money.1 The word "potentially" means the number is built from indicators, data matching, and risk analysis. Some of it may be proven as fraud. Some may not.

The Labor Department inspector general counts unemployment money two ways: improper payments (at least $191 billion "could have been improper payments") and payments in high-risk areas ($45.6 billion of "potentially fraudulent" benefits). In February 2023 the inspector general presented both figures to the House Ways and Means Committee at a hearing titled "The Greatest Theft of American Tax Dollars: Unchecked Unemployment Fraud."2 An improper payment can be fraud. It can also be an eligibility error, a documentation failure, an agency mistake or a mismatch with a later rule. GAO's September 2023 estimate, $100 billion to $135 billion in unemployment-insurance fraud, is narrower than the broadest improper-payment claims, and it is still an estimate.3

The HHS inspector general estimated that the Uninsured Program, which paid providers for COVID-19 testing and treatment of uninsured patients, made nearly $784 million in improper payments for insured individuals or non-COVID services.4 That does not mean every provider committed fraud. The Justice Department's settlement with CityMD is stronger evidence because it names a company, and even that settlement resolved allegations without a determination of liability.5

The Employee Retention Credit record shows the whole range in one program. IRS warnings and its halt on processing new claims describe questionable claims. The Treasury Inspector General for Tax Administration reported on erroneous claims and on the actions IRS management took against them. The Credit Reset case moved from indictment to guilty pleas and a sentence.6

Treating all of these as one number lets every side cheat.

Agencies can inflate success by saying they "blocked" or "flagged" billions without proving that every blocked dollar was criminal. Critics can inflate scandal by calling every improper payment stolen. Defendants can minimize misconduct by pointing out that an estimate is not a conviction, even when the underlying controls were weak. Reporters can turn "suspected fraud" into "fraud" because the shorter phrase fits the headline.

Each number should carry its label every time:

  • Conviction or guilty plea.
  • Civil settlement, with or without admission.
  • Indictment or complaint allegation.
  • Agency estimate.
  • Potential-fraud flag.
  • Improper payment.
  • Actual recovered loss.

Notes

  1. SBA-OIG, COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape, Source document. ↩
  2. DOL-OIG, The Greatest Theft of American Tax Dollars: Unchecked Unemployment Fraud, testimony of Inspector General Larry D. Turner before the House Committee on Ways and Means, No. 19-23-003-03-315, Feb. 8, 2023, Source document; DOL-OIG, Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas Increased to $45.6 Billion, No. 19-22-005-03-315, Sept. 21, 2022, Source document. ↩
  3. GAO, Pandemic Unemployment Assistance: States' Controls to Address Fraud, GAO-24-107471 (July 2024), restating GAO's September 2023 estimate of $100 billion to $135 billion in UI fraud from April 2020 through May 2023, Source document. ↩
  4. HHS-OIG, HRSA Uninsured Program audit, Source document. ↩
  5. DOJ/CityMD settlement announcement, June 2024, Source document. ↩
  6. IRS news release IR-2023-169, Sept. 14, 2023 (processing halt), Source document, and IR-2023-170, Sept. 14, 2023 (warning signs of aggressive promotion), Source document; TIGTA ERC report, Source document; United States v. Keith Williams, et al. (Credit Reset), No. 2:25-cr-00020 (E.D.N.Y.), Indictment, Jan. 15, 2025, and docket: Tiffany Williams's change-of-plea hearing, Sept. 15, 2025, and judgment, May 11, 2026 (Doc. 124); Janine Davis's change-of-plea hearing, May 14, 2026. ↩
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