Billions of dollars in COVID-19 relief funds that were intended to help US citizens struggling during the pandemic were misappropriated by fraudsters who used it to purchase luxury goods, cars and mansions, say government watchdogs.

The massive fraud was carried out by ordinary people and organized thieves who stole at least $80 billion from a COVID-19 relief program called the Paycheck Protection Program, or PPP, which gave out $800 billion in loans, according to the inspector general of the Small Business Administration, or SBA.

On April 7, an Oklahoma woman pleaded guilty in court in the Western District of New York in relation to a scheme to defraud the program of more than $43.8 million in coronavirus relief loans.

Amanda Gloria, 45, admitted to conspiring to submit at least 153 fraudulent PPP applications seeking a total of about $43.8 million on behalf of at least 111 entities between approximately May 2020 and June 2021.

She obtained $32.5 million in PPP funds and personally received about $1.7 million.

Gloria faces up to 30 years in prison for conspiracy to commit bank fraud, as well as up to 10 years for money laundering.

From 2020, the economic fallout from the coronavirus pandemic resulted in the US government issuing financial assistance programs worth trillions of dollars. They included the CARES Act of 2020, the Consolidated Appropriations Act of 2021, and the American Rescue Plan Act of 2021.

False information used

However, the programs attracted criminals who used false information to get money. They then spent lavishly on car brands such as Tesla, Ferrari and Bentley, as well as vacations and jet skis, according to the Justice Department.

Nationwide, 178 people have been convicted in PPP fraud cases, according to the department. Other cases are pending, but it is believed that much of the stolen funds can't be recovered.

To stop further fraud, the administration of US President Joe Biden put new verification procedures in place on loans from the relief funds. At least $600 billion in loans have been halted while recipients are investigated.

Altogether, experts who are digging into the fraud believe that the total amount stolen from COVID-19 programs could be $579 billion, but that total is provisional as it is still under investigation.

Some people who have been accused of using PPP funds for fraudulent means were charged with creating fake companies and misrepresenting their tax and payroll records. Others submitted false certifications of the gross revenue of their businesses or the number of employees they had.

PPP fraud has been difficult to detect because authorizing banks would issue government-backed loans to businesses.

The loans would be forgiven and written off if the companies could show that they spent the money on business expenses, so many did so. More than 10 million loans were made and written off, many for millions of dollars.

The probe into PPP fraud has found that lenders also participated in the scams, according to Reuters, as the PPP provided lender fees.

In 2020, many banks and other financial institutions didn't verify applications as carefully as they should have, prosecutors said.

Banks also were careless because Congress required the SBA, which ran the program, to tell the banks that lenders "will be held harmless for borrowers' failure to comply with program criteria".

US government watchdogs found that widespread fraud extended to most of the COVID-19 relief programs. They are now working to detect them all.

The government is asking ordinary citizens to report fraud via the False Claims Act.

Furthermore, 150 million records are being probed for fraud by data scientists working on behalf of the Pandemic Response Accountability Committee－an independent oversight committee.

The Justice Department said it also is carefully looking through records to detect fraudulent activity.

In 2021, Attorney General Merrick Garland established the COVID-19 Fraud Enforcement Task Force to coordinate the department's enforcement resources in partnership with other agencies.

Garland wrote in a memo to the task force: "The Department of Justice will use every available federal tool－including criminal, civil, and administrative actions－to combat and prevent COVID-19 related fraud."