A 2022 study from the University of Texas at Austin found almost five times as many suspicious Paycheck Protection loans as the $20 billion Small Business Administration’s (SBA) inspector-general has reported so far.

The research, led by finance professor John Griffin, found as much as $117 billion in questionable and possibly fraudulent loans, citing indicators such as non-registered businesses and multiple loans to the same address.

The pandemic watchdog chairman, Michael Horowitz, who is also the US Justice Department inspector-general, criticised the government’s failure early on to use the “Do Not Pay” Treasury Department database, designed to keep government money from going to debarred contractors, fugitives, felons or people convicted of tax fraud. Those reviews, he said, could have been done quickly.

“It’s a false narrative that has been set out, that there are only two choices,” Horowitz said. “One choice is, get the money out right away. And that the only other choice was to spend weeks and months trying to figure out who was entitled to it.”

In less than a few days, a week at most, Horowitz said, SBA might have discovered thousands of ineligible applicants.

“24 hours? 48 hours? Would that really have upended the programme?” Horowitz said. “I don’t think it would have. And it was data sitting there. It didn’t get checked.”

The Biden administration put in place stricter rules to stem pandemic fraud, including use of the “Do Not Pay” database.

President Joe Biden also recently proposed a $1.6 billion plan to boost law enforcement efforts to go after pandemic relief fraudsters.

“I think the bottom-line is regardless of what the number is, it emanates overwhelmingly from three programmes that were designed and originated in 2020 with too many large holes that opened the door to criminal fraud,” Gene Sperling, the White House American Rescue Plan coordinator, said in an interview.

“We came into office when the largest amounts of fraud were already out of the barn,” Sperling added.

In a statement, an SBA spokesperson declined to say whether the agency agrees with the figures issued by Ware’s office, saying the federal government has not developed an accepted system for assessing fraud in government programmes.

Previous analyses have pointed to “potential fraud” or “fraud indicators” in a manner that conveys those numbers as a true fraud estimate when they are not, according to the statement.

The coronavirus pandemic plunged the US economy into a short but devastating recession. Jobless rates soared into double digits and Washington sent hundreds of billions of dollars to states to help the suddenly unemployed.

For crooks, it was like tossing chum into the sea to lure fish. Many of these state unemployment agencies used antiquated computer systems or had too few staff to stop bogus claims from being paid.

“Yes, the states were overwhelmed in terms of demand,” said Brent Parton, acting assistant secretary of the US Labour Department’s Employment and Training Administration. “We had not seen a spike like this ever in a global event like a pandemic. The systems were underfunded. They were not resilient. And I would say, more importantly, were vulnerable to sophisticated attacks by fraudsters.”

Fraud in pandemic unemployment assistance programmes stands at $76 billion, according to congressional testimony from Labor Department Inspector General Larry Turner. That’s a conservative estimate. Another $115 billion mistakenly went to people who should not have received the benefits, according to his testimony.

Turner declined AP’s request for an interview.

Turner’s task in identifying all of the pandemic unemployment insurance fraud has been complicated by a lack of cooperation from the federal Bureau of Prisons, according to a September “alert memo” issued by his office. Scam artists used Social Security numbers of federal prisoners to steal millions of dollars in benefits.

His office still doesn’t know exactly how much was swiped that way. The prison bureau has declined to provide current data about federal prisoners. The agency did not respond to a request for comment.

Ohio’s State Auditor Keith Faber saw trouble coming when safeguards to ensure the unemployment aid only went to people who legitimately qualified were lowered, making conditions ripe for fraud and waste. The state’s unemployment agency took controls down because on the one hand, they literally were drinking from a firehose,” Faber said.

“They had a year’s worth of claims in a couple of weeks. The second part of the problem was the (federal government) directed them to get the money out the door as quickly as possible and worry less about security. They took that to heart. I think that was a mistake.”

Ohio’s Department of Job and Family Services reported in February $1 billion in fraudulent pandemic unemployment claims and another $4.8 billion in overpayments.

The ubiquitous masks that became a symbol of the Covid-19 pandemic are seen on fewer and fewer faces. Hospitalisations for the virus have steadily declined, according to CDC data, and Biden in April ended the national emergency to respond to the pandemic.

But on politically divided Capitol Hill, lawmakers have not put the pandemic behind them and are engaged in a fierce debate over the success of the relief spending and who’s to blame for the theft. Too much government money, Republicans argue, breeds fraud, waste and inflation. Democrats have countered that all the financial muscle from Washington saved lives, businesses and jobs.

Republicans and Democrats did, however, find common ground last year on bills to give the federal government more time to catch fraudsters. Biden in August signed legislation to increase the statute of limitations from five to 10 years on crimes involving the two major programs managed by the SBA.

The extra time will help federal prosecutors untangle pandemic fraud cases, which often involve identity theft and crooks overseas. But there’s no guarantee they’ll catch everyone who jumped at the chance for an easy payday. They’re busy, too, with crimes unrelated to pandemic relief funds.

“Do we have enough cases and leads that we could be doing them in 2030? We absolutely could,” said Fruchter, the federal prosecutor in the Eastern District of Washington. “But my experience tells me that likely there will be other priorities that will come up and will need to be addressed. And unfortunately, in our office, we don’t have a dedicated pandemic fraud unit.”

Congress has not yet passed a measure that would give prosecutors the additional five years to go after unemployment fraudsters. That worries Turner, the Labor Department watchdog. Without the extension, he told Congress in a late May report, people who stole the benefits may escape justice.

Sperling, the White House official, said any future crisis that requires government intervention doesn’t have to be a choice between helping people in need and stopping fraudsters.

“The prevention strategy going forward is that in a crisis, you can focus on fast delivery to people in desperate situations without feeling that you can only get that speed by taking down common sense anti-fraud guardrails,” he said.

• An AP report