In December, California authorities raided a strip mall store in Garden Grove. Within, they found a scam that was so audacious that it boggles the mind.
The scammers who were running the illicit operation were helping to register “clients” as unemployed in order to rake in juicy unemployment benefits that were meant to help with those struggling from the pandemic.
In other words, taxpayer money was being stolen right out from under the public’s nose. Moreover, people who were not in any need of extra assistance from the government were filing for unemployment, potentially depriving people who actually needed help from receiving any aid.
According to investigators, as much as $100 billion of the funds appropriated for the CARES Act may have been misspent. This is due to widespread, staggering fraud being perpetrated by scammers raking in money on false unemployment claims. The perfect storm of the pandemic hitting alongside historic government spending opened a lane for dishonest fraudsters to line their pockets with taxpayer dollars.
The massive pressure on state officials to release the funds from the CARES Act in order to help those in need led to ample opportunities for scammers to prey on the situation. From individual bad actors to massive crime rings, investigators claim that the CARES Act was subject to a massive amount of fraud.
Investigators with the federal government have told reporters that the scale and complexity of the schemes that targeted the CARES Act are so massive that it will take months to get a full picture of just what has happened. The worst part is that many of these criminals will likely never be caught. The bureaucratic red tape and poor management at the state level means that by the time law enforcement catches up–assuming that they can even pinpoint where the fraud happened–it may be too late to find the suspects.
Many advocates for worker’s rights and unemployment benefits fear that the government may learn the wrong lesson from this incident. Rather than shoring up security, they fear, the next round of assistance may be further means-tested, perhaps precluding many in need from receiving any help.
In this way, the scammers may steal from the American people twice. Once, when they initiated a widespread series of scams in bad faith, drawing unemployment funds that could have gone to those in need. And, again, if the government is more hesitant to disperse funds to help those in need for fear of another round of scammers taking them for a ride and making out like bandits.