The U.S. government handed out some $200 billion to potential fraudsters who illegally raked in bailout funds designed to weather the economic storm from the Covid-19 pandemic.

That is according to a report published Tuesday by the inspector general of the Small Business Administration, the entity charged with managing the payouts.

The eye-watering sum amounts to approximately 17% of the $1.2 trillion dispersed by SBA.

The money was set to aside to compensate businesses affected by successive COVID-19 lockdowns

The money was set to aside to compensate businesses affected by successive COVID-19 lockdowns

The money was set to aside to compensate businesses affected by successive COVID-19 lockdowns

The report focuses on two schemes: the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL)

SBA inspector general Hannibal ‘Mike’ Ware, who is independent of other SBA officials, said his team is still probing further misuse of taxpayer cash and other abuses that occurred during the pandemic.

His investigation said  there could be billions more in fraudulent payments linked to a low-interest disaster loan that would later require repayment. 

Ware’s report said the total could be as much as  $136 billion of potential fraud in the EIDL program, representing 33% of the total funds dispersed to businesses.

For PPP, officials gave a much-lower estimate of around $64 billion, representing 8% of the total funds sent out.

It follows an analysis by the Associated Press that found that tricksters had passed off social security numbers of dead people or federal prisoners as their own to rake in unemployment checks.

They sometime even collected benefits in multiple states, the report said.

Investigators accuse the U.S. government of failing to provide enough oversight during the pandemic’s early stages.

They also claim that they slapped too few restrictions on applicants, giving possible fraudsters easy access to money stumped up by hard-working Americans.

Joe Biden signed a law in August that extended the statute of limitations for fraud-related crimes

Joe Biden signed a law in August that extended the statute of limitations for fraud-related crimes

Joe Biden signed a law in August that extended the statute of limitations for fraud-related crimes

Donald Trump signed off on more than $3 trillion in COVID-related bailout aid, according to official figures

Donald Trump signed off on more than $3 trillion in COVID-related bailout aid, according to official figures

Donald Trump signed off on more than $3 trillion in COVID-related bailout aid, according to official figures

In an October 2020 interim report, inspector general Ware said to expedite the process, SBA ‘lowered the guardrails’ or relaxed internal controls, which significantly increased the risk of program fraud.’

In a response to his latest findings, the SBA appeared to doubt his numbers and queried how he had arrived at such an estimate. 

The government body said Ware’s report ‘contains serious flaws that significantly overestimate fraud and unintentionally mislead the public to believe that the work we did together had no significant impact in protecting against fraud.’

The inspector general’s review allowed for ‘a high percentage of false positives,’ or potential fraud cases that, upon further inspection, were not fraud, Bailey DeVries, Acting Associate Administrator of the SBA, said.

But DeVries did not cite specific examples in his reply to Ware. 

In total, the U.S. government handed out estimated $5 trillion in relief funds since the beginning of the pandemic and across several programs.

DOJ officials have so far brought charges against 2,230 people for fraud related to Covid relief funds.   

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