June 12, 2021

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PR Treasury Halts $ 219M in Federal Covid-19 Payments Fraudulently Claimed – Caribbean Business


Illegal Applications for $ 1,200 Payments Likely Result of Off-island Identity Theft Ring, Parés says

SAN JUAN – Puerto Rico Treasury Department Secretary Francisco Parés Alicea said Wednesday that his agency halted $ 219.7 million in payments to individuals who fraudulently applied for federal aid disbursed under the Coronavirus Aid, Relief and Economic Security Act (Cares Act).

Parés acknowledged that some of these applications for the $ 1,200 payments were processed after the US Internal Revenue Service (IRS) validated the identity of the claimants. He said that his agency reported the fraudulent applications to federal authorities, who are investigating the matter.

“We began to process the distribution and disbursement of the [Cares Act] Economic Impact [payments] to residents of Puerto Rico since last May, and identified some 190,000 applications from people who we understand provided false information for the only purpose of obtaining the $ 1,200 payment and other federal economic aid, including PUA [Pandemic Unemployment Assistance], ”Parés said in a press release. “We believe that it could involve an identity theft scheme, given that the [IRS] itself validated the identification numbers of the presumptive claimants, as it is required by the Distribution Plan approved by the US Treasury for the $ 1,200 payment. ”

The Treasury chief said that a “minimum amount” of payments corresponding to the more than 190,000 applications were sent out, given that the claimants’ information was validated according to protocols the federal and Puerto Rico governments agreed to, but assured that “hundreds of thousands of other applications were discarded automatically. ”

The people identified in the fraudulent applications do not have any tax record in Puerto Rico, Parés said, adding that “everything indicates that these are people who do not reside on the island.”

Nevertheless, the sense of urgency and expertise of [Treasury] employees as well as digital tools managed to stop the payments in most of these cases, ”he said, noting that the Treasury Department has made further adjustments to the process to reduce the risk of issuing payments as a result of fraudulent applications prospectively.

Parés said that the Treasury Department is prepared to process the second round of Covid-19 stimulus funding in Covid-19 emergency legislation approved by Congress this week, but that has yet to be signed by President Trump.

The Treasury chief reminded the public that it is a federal crime to submit false information to benefit from money intended to alleviate the situation of people affected by the Covid-19 pandemic.

“We warn citizens that they must be honest when offering information to receive this type of aid, given that today our agency has the technological infrastructure necessary to detect this and other types of fraud,” Parés said.



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