Tens of thousands of federal employees bilked government of pandemic cash

Tens of thousands of federal employees stole taxpayers’ money by filing bogus pandemic loan requests.

Sen. Joni Ernst wants each of them fired.

“I hope this money can be recovered, and, to deter those who might ever think of trying to do this again in the future, those who abused the public trust will have their federal employment terminated,” the Iowa Republican said in a letter to Michael E. Horowitz, the inspector general leading the Pandemic Response Accountability Committee.

The employees were flagged by the committee’s Pandemic Analytics Center of Excellence, a data-driven attempt to sniff out fraud in the trillions of dollars of pandemic assistance that the federal government has paid out over the past three years.

PACE built a database of all pandemic loan applications filed with the Small Business Administration, matched it to lists of federal employees and came up with leads to investigate. It then worked with inspector general offices in various federal agencies to follow up.

“So far, this analysis has helped six agency OIGs match tens of thousands of employees with SBA loans for which they were not eligible,” PACE’s overseers at the Pandemic Response Accountability Committee said last month in a report to Congress.

Ms. Ernst tapped the double-dipping federal employees for her “Squeal award,” which she bestows on wasteful government spending. The award is derived from a campaign commercial in which Ms. Ernst, who grew up on an Iowa farm where she castrated pigs, vowed to take her skills to Washington and make the big spenders “squeal.”

The loans the employees took were from the Paycheck Protection Program and the Economic Injury Disaster Loan program, both aimed at bolstering small businesses so they didn’t shutter during the early economic troubles.

Ms. Ernst said investigators should also look at federal employees’ use of pandemic unemployment benefits.

She pointed to a report by the Homeland Security Department’s inspector general that found hundreds of department employees claimed unemployment even though they were still collecting their government salaries.

Some 900 claims were deemed clearly ineligible, and another 900 were suspect.

Even worse, the department paid the money itself. One of the stages of unemployment was run by the Federal Emergency Management Agency. The audit said $2.6 million was paid out to potentially fraudulent claims from department employees.

Nearly three dozen employees filed unemployment claims from Homeland Security computer systems, suggesting they were on the job at the exact time they were claiming unemployment.

In 366 cases, pay records showed that employees received unemployment benefits even though they were putting in overtime or extra shifts. One employee averaged 147 hours of work per two-week pay period while the department was paying unemployment.

“It is appalling for anyone fortunate enough to have the reliability of a government paycheck to take advantage of financial assistance intended to provide a lifeline to Americans who lost their jobs or were unable to work as a result of the COVID-19 pandemic,” the senator wrote to the inspector general consortium. “These misbehaved bureaucrats have also tarnished the reputation of the other dedicated civil servants, many of whom worked long hours in essential jobs during the pandemic.”

Among cases that have emerged so far is a series of IRS employees who stand accused of claiming bogus small-business loans.

In New Hampshire, a full-time employee at the tax agency claimed he worked at a hair and nail salon and collected $62,300 in pandemic loan payments. Charles Clark pleaded guilty. He died before he could be sentenced.

Five IRS employees near Memphis, Tennessee, stand accused of collecting more than $1 million in bogus loans.

Georgia’s inspector general reported earlier this month that more than 280 full-time employees in the state government wrongly claimed unemployment benefits in 2020 or 2021. They were paid more than $6.7 million, or an average of $23,700 apiece.

Most appalling are the cases in which employees who worked in their state workforce agencies — the bureaucrats responsible for paying unemployment — were applying for, and approving, their own bogus claims or those of relatives or friends.

Tiffany Pacheco had just emerged from prison after serving time for aggravated identity theft and passing bad checks when Massachusetts hired her to work in its unemployment agency processing benefit claims.

She went on to steal identities from some of the claimants and filed bogus claims in their names, as well as false claims in her own name and that of her husband. All told, she walked away with nearly $200,000 in bogus payments, prosecutors said.

Pacheco was slapped with a 42-month prison sentence.

In Missouri, Vicky Hefner stands charged with stealing $140,000 in unemployment that authorities say she siphoned to friends and relatives through her position at the state’s employment agency. Those friends and family paid her kickbacks, authorities said.

For more information, visit The Washington Times COVID-19 resource page.