Feds Struggled to Claw Back Covid Fraud while Schemers Put Down Payments on Yachts, Lamborghinis
COVID-19 programs to help families and businesses stay afloat inadvertently diverted hundreds of billions to scammers who spent thousands on wish-list items like luxury cars and plastic surgery.
The actual amount of pandemic-related fraud, however, is unknown not only to us but also to the federal government. What’s more, the amount that the federal government has recouped makes up a scant 0.47% of the government’s fraud guestimate.
The difficulty of recouping these ill-gotten gains makes it even more critical that government programs are designed with far better guardrails in place. Scrutiny on the front end, even at some added investment, is imperative; the Covid era demonstrated that once money has left public coffers, it’s incredibly challenging to recover all or even much of it.
Background
Previously, Open the Books identified an estimated $400 billion in fraud in a series of COVID-19 programs due to a rushed rollout and lax oversight. Although the full extent of pandemic relief fraud is not known, estimates from some of the largest pandemic relief programs put losses at around $300 billion.
If we take that $300 billion and divide it up among taxpayers, that leaves households on the hook for
$2,260 each. $400 billion, on the other hand, would cost households an eye-catching $3,013 each.
Congress authorized about $4.6 trillion in emergency COVID-19 relief between 2020 and 2021 for vulnerable businesses and struggling families, but fraud was identified in at least 19 different pandemic-relief programs, according to an April 2025 Government Accountability Office (GAO) report. If the government’s $300 billion fraud calculation is correct, then 6.5% of all pandemic aid was incorrectly distributed. What we have compiled is just a fraction of the hundreds of charged cases and undetected schemes.
The last update from the Department of Justice regarding how much stolen COVID-19 relief funds were seized or forfeited — over $1.4 billion — was in April of 2024. While this is described more broadly as “stolen COVID-19 relief funds” by the DOJ, the COVID-19 Fraud Enforcement Task Force classifies the figure as Coronavirus Aid, Relief, and Economic Security Act (CARES Act) funds seized or forfeited. This means that the federal government has only recovered $10.55 per household. That leaves the remaining fraud tab nearly untouched.
Small Business Relief Programs
The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) programs were cornerstone small business relief initiatives implemented under Congress’ CARES Act, offering over $1.2 trillion in total aid.
The Small Business Administration’s (SBA) internal watchdog reported that 17% of all PPP and EIDL funds were flagged for fraudulent activity — with a $200 billion price tag. Open the Books identified well over $100 billion in PPP losses alone; an estimated $136 billion was stolen by criminals, con artists, and crime rings from around the world.
The SBA’s previous ballpark of $36 billion in fraudulently obtained funds from the two programs found that 86% of it originated in 2020. It later estimated 40.5% of PPP loan forgiveness payments and 49.2% of PPP guarantee purchase payments were improper in fiscal year 2023, though the SBA noted roughly 95% of the forgiveness figure consisted of unverifiable payments rather than confirmed fraud.
While the agency tracks some PPP and EIDL improper payment data, the SBA does not have a “sufficient process” for tracking identified overpayments and subsequent recoveries, according to the GAO.
NOTE: We went into further detail about the lax protocols for these programs at a March hearing before the Senate Small Business Committee. Click here to watch the hearing.
The COVID-19 Fraud Enforcement Task Force recovered over $1.4 billion in fraudulently obtained CARES Act funds, according to its 2024 report.
Unemployment Insurance
Congress created four new and temporary emergency unemployment insurance programs in the wake of the pandemic, including Pandemic Unemployment Assistance (PUA), which extended benefits to gig workers and the self-employed.
Open the Books found that unemployment aid was robbed of $200 billion. The Labor Department’s Office of Inspector General estimated that at least $191 billion could have been improper payments, with a “significant portion” attributable to fraud.
The DOL estimated that 35.9% of PUA payments were improper, translating to $47 billion of its $131 billion.
The DOL’s internal watchdog estimated total pandemic unemployment insurance (UI) fraud losses may exceed $45 billion, jumping from over $16 billion in potentially fraudulent UI pandemic benefits in 2021. But the GAO calculated that improper payments rose from approximately $8 billion in the 2020 fiscal year to about $78.1 billion the next fiscal year. The GAO report was released in June 2022, while the DOL OIG’s report came out in September of the same year — two watchdog agencies with dramatically different estimates.
The GAO later estimated fraud could be between $100 billion and $135 billion from April 2020 through May 2023 — an almost 73% maximum increase from its $78.1 billion improper payments calculation three years prior.
Even combining all recovery channels — state-level clawbacks and criminal restitution and forfeiture — the total amount recovered is between $5 billion and $6 billion. That’s a recoupment rate of somewhere between 3.7% and 6% of estimated fraud.
State Recovery Funds
The American Rescue Plan Act of 2021 (ARPA) provided $350 billion in Coronavirus State and Local Fiscal Recovery Funds (SLFRF), which still has millions left to divvy out.
However, there is no single published estimate for total ARPA fraud specifically, and that gap is itself a documented oversight failure.
ARPA was an umbrella law that funded many different programs administered by different agencies. Unlike single-agency programs with dedicated OIG oversight, such as PPP under the SBA or unemployment insurance under the DOL, ARPA’s $1.9 trillion flowed through dozens of programs across multiple agencies, meaning no watchdog has a unified fraud calculation.
Take for example the Treasury Department. It established and modified its monitoring procedures, reviewing how SLFRF was spent, but it did not document those changes in key internal program guidance, creating a risk that the new procedures would not be implemented consistently, according to the GAO. Treasury also did not issue timely management decisions on SLFRF findings in recipients’ single audit reports, meaning it did not have “reasonable assurance” that unallowable uses of funds were identified or remediated, leaving the fraud door wide open.
From 2022 to 2024, thousands of SLFRF recipients did not meet the reporting deadline for project and expenditure reports, according to the GAO. The Treasury Department issued notices of noncompliance and conducted targeted outreach, but reporting remained inconsistent. As of January 2025, recipients that had never submitted a report accounted for about $139 million in combined awards.
In short, total ARPA/SLFRF fraud is unknown because the oversight infrastructure to measure it was never fully built.
Luxury Cars, Yachts, and Payments to Nancy Drew
Carl Delano Torjagbo defrauded the government out of $13 million, including a $9.6 million PPP loan and filing fraudulent tax returns that generated a $3.4 million IRS refund.
His tax returns falsely reported bogus losses for Kremkov Industries, Mr. Torjagbo’s alleged gold mining business in Ghana. His PPP loan application falsely certified that Kremkov Industries had 493 employees, including nearly a dozen celebrities and fictional characters: Keanu Reeves, Gene Hackman, Charlie Brown, Nancy Drew, John Snow, and Emilia Clarke. Mr. Torjagbo used those funds to pay personal debts, purchase a mansion in Marietta, Georgia, and spend over $15,000 for plastic surgery.
If such scammers do not have an appetite for honesty, many have a shared expensive taste in luxury cars.
Mr. Torjagbo was ordered to forfeit property and proceeds obtained through his scheme, including roughly
$333,000 for a 2014 Lamborghini Aventador, $120,800 for a 2022 BMW M850xi, $90,520 for a 2021 Land Rover Range Rover Velar, and $51,000 for the down payment on a 72-foot yacht.
One fraudster withdrew $60,000 of fraudulently obtained money to help purchase a 2019 Porsche Turbo Cabriolet. In another case, federal agents seized a Porsche and a Lamborghini in what one U.S. attorney described as “one of the largest PPP conspiracies in the country.” Two others utilized the majority of their stolen funds for cryptocurrency investments, purchasing stocks, leasing luxury apartments, and buying a Mercedes-Benz.
But none of these examples count estimates that imply that at least half of all stolen COVID-19 relief funds went overseas to Russian, Chinese, and Nigerian criminals.
There is still more COVID-19 fraud we have not mentioned: pandemic-related health care fraud (as Open the Books has documented in the Cost of Fraud series), stimulus checks paid out to dead people, and tax credits. One New Jerseyan sought more than $170 million in fraudulent COVID-19-related tax refunds, resulting in the largest COVID-19 tax relief fraud case to be tried in the country as of April this year.
The federal response
The COVID-19 Fraud Enforcement Task Force, established in 2021, has criminally charged more than 3,500 defendants and filed more than 400 civil suits that have led to settlements or judgments. According to a GAO analysis of Justice Department public statements and court documentation from March 2020 to December 2024, 46% of the 1,875 defendants convicted of pandemic-fraud-related offenses with final charges recorded had conspiracy charges, which the GAO says suggests involvement of an organized group.
A 10-year statute of limitations for criminal charges and civil enforcement in PPP and EIDL-related fraud was extended in 2022. In January 2025, Congress introduced legislation to extend the statute of limitations for violations relating to pandemic UI programs and other pandemic-relief programs to 10 years. DOJ officials say this gives law enforcement, investigators, and prosecutors more time to uncover potential fraud and to develop cases.
The Pandemic Response Accountability Committee, established by the CARES Act to support fraud prevention and detection efforts across federal programs using data analytics, was provided $88 million through the One Big Beautiful Bill Act in 2026 fiscal year funding to keep it operational through 2034.
While PRAC has flagged billions in anomalies, it is to be determined whether the return on investment over the next decade — including the six remaining years on the PPP and EIDL statute of limitations
— will be worth the price tag.
Conclusion
As we wrote in Newsweek during the immediate aftermath of the pandemic emergency, we wrote:
“The case will certainly be made that COVID was too urgent a matter to craft a more careful spending plan, but Congress’ failure to spend money efficiently is a problem that predates the virus. As the regular budget process has broken down into an endless series of “emergency” spending bills passed at the last moment, the national debt has spiraled from $5.8 trillion to more than $30 trillion over the last 20 years.
“The House of Representatives is trusted with the power of the purse—to make prudent decisions, staff government appropriately for new projects, and direct money where it’s most needed.
“Far too often, Congress chooses to simply empty the purse on the table and let everyone pick through the loot. These ridiculous COVID spending examples should be a basic reminder for lawmakers: respect America’s taxpayers and apply some critical thinking to your spending choices.”
As Congress appropriates funds, and as Executive Branch officials design their spending programs, they must learn from past lessons and begin prioritizing far better safeguards against waste, fraud and abuse. Once the money is spent, it’s often simply too late.
FURTHER READING
The COVID Aid Waste Compendium
Ghost Rides: Massachusetts Billed Medicaid for 16,907 Trips That Never Happened
Hidden Fees: Federal Taxpayers on the Hook for Autism Fraud Through Medicaid
Hidden Fees: Taxpayers on the Hook for Foreign-Linked Health Care Fraud Schemes
My stomach is turning as I read through these numbers. Congress is nothing but a den of thieves. Forensic audit them anyone in office frim Obamas's tenure and forward. Thinking about the state of Republic: Our veterans, homeless, drug addicted Americans. Our outdated airports, streets, bridges. Big Pharma profits🤬 our national debt. We have been a banana republic far longer than imaginable. Tighten the belt now. Cut all bullshit aid to anyone. Stop bullshit research. Pet projects. Just put the brakes on.
The U.S. government is one big bank job. It is far too easy for people to steal, so in my opinion the government is in on it. And why not? There is almost no risk of going to jail!