Senior official estimates $30 billion in stimulus funds will be stolen through coronavirus scams
A top official with the U.S. Secret Service said Tuesday that coronavirus-related fraud could lead to $30 billion in federal relief funds being stolen by criminals.
“Congress has appropriated nearly $3 trillion to support the American economy, the largest-ever economic stimulus package in U.S. history,” Secret Service Assistant Director Michael D’Ambrosio testified during a Senate Judiciary Committee hearing on coronavirus-related fraud.
He emphasized that “even if we assume a very low rate of fraud, of just 1 percent, we should still expect more than $30 billion will end up in the hands of criminals. And that is likely an underestimation of the risk, and just one portion of the full range of risks at play.”
D’Ambrosio noted that much of this theft is occurring online, such as through cyber criminals targeting Americans with malicious coronavirus-related phishing emails, or through targeting cyberattacks at the insecure networks of those working from home.
The Secret Service has taken steps to counter these scams, with D’Ambrosio saying the agency had disrupted “hundreds” of scams and prevented around $1 billion from being lost to malicious actors.
“Countering criminal schemes seeking to exploit the COVID-19 pandemic has become a primary investigative focus for the U.S. Secret Service, and will remain so over the coming years,” D’Ambrosio said.
The COVID-19 pandemic has led to a spike in scams against Americans, including those targeting small business relief funds and stimulus checks from the government.
The Secret Service put out an alert in March as coronavirus began to spread worldwide warning of an uptick in phishing emails related to the virus, and urging Americans to be cautious when opening emails related to COVID-19.
Google announced in April that it was tracking more than 18 million malware and phishing emails related to COVID-19 per day. The Justice Department said the same month that it had notified internet domain hosts of hundreds of websites that were attempting to use coronavirus fears to scam or compromise network security.
Associate Deputy Attorney General William Hughes testified at the same hearing on Tuesday that the Justice Department was also tracking attempts by cyber criminals to use the COVID-19 pandemic to target both children and those working from home.
“Child predators on the internet see widespread closing of schools, stay at home orders, and the reliance on internet platforms as the primary means of communication as an opportunity to prey on children,” Hughes said. “Cyber criminals also see the widespread work from home posture of many American businesses as an opportunity to attack and infiltrate business computer networks, to disable systems or steal or hold hostage valuable data.”
Hughes vowed that the Justice Department would investigate and bring cases against these criminals “for the foreseeable future.”
Craig Carpentino, the U.S. attorney for the District of New Jersey, testified Tuesday that the rise in scams and cyber targeting during the pandemic was to be expected.
“When you put this kind of money out into the ether because you have to take care of society and take care of those who desperately need it, the cockroaches are going to come out of the dark and into the light,” Carpentino said.