Vice President Joe Biden told federal fraud investigators that they've built "an exceptionally well-lit house" that burglars don't want to break into. (Saul Loeb / AFP via Getty Images)
PHILADELPHIA — Openness and a focus on preventing fraud have helped ensure that fraud and abuse of stimulus spending has been kept "to a surprisingly low level," Vice President Biden said Tuesday.
Biden told federal fraud investigators meeting here this week that they've built "an exceptionally well-lit house" that burglars don't want to break into.
"Remember what critics were saying in the beginning? Go back and Google it. They said there's no way this can be done without massive fraud," Biden said. "I stand before you today to say firmly, our critics were wrong because of you."
Biden, dubbed the Recovery Act's "Sheriff Joe" by President Obama, spoke Tuesday to about 500 federal prosecutors, auditors and investigators at the National Procurement and Grant Fraud Conference.
As of Sept. 30, there have been 4,809 complaints and tips alleging wrongdoing, according to the Recovery Accountability and Transparency Board, a council of federal inspectors general set up to monitor the stimulus. The board also runs Recovery.gov, the website that publishes data on how stimulus money is being spent. The inspectors general had more than 560 open investigations into those complaints — a small fraction of the 210,000 stimulus contract and grant recipients.
Excluding tax cheating, less than $3 million in stimulus money has been found to involve fraud, Biden said.
One number the vice president didn't mention: The 22 convictions and judgments for stimulus fraud as of Sept. 30. That number comes from agency reports submitted to the recovery board.
At least some of those convictions appear to involve low-level fraud related to federal benefits, where stimulus money is one part of a larger case.
A typical example: Chinyere Etoty, a 50-year-old Cockeysville, Md., woman sentenced in September to 45 months in prison. Prosecutors said she used the Social Security number of a disabled Illinois woman to get $22,000 in federal student aid. That student aid was funded by the stimulus, but the fraud had been going on for 25 years, according to court documents.
Six convictions involving Labor Department funds involved unemployment benefits, said Christopher Siegel, a spokesman for the department's inspector general.
Earl Devaney, chairman of the recovery board, said the Obama administration's efforts have prevented most fraud — but not all. "Inevitably, there will be major fraud arrests," he said.
"The gestation period for a fraud investigation is about two years," he said. The Recovery Act hits its two-year mark in February.
Devaney said fraud detection and prevention efforts have made a difference in other federal spending. For example, six people have been convicted of stealing the special $250 Social Security stimulus checks last year.
"Not only did the son cash his dead father's stimulus check, but he'd been cashing his Social Security checks for four years," Devaney said. "So that $250 case became a $70,000 case."
Biden said he'd like to expand the system of stimulus oversight to include all federal spending: "I may have been tapped as Sheriff Joe for the Recovery Act, but no one said my jurisdiction had to be limited to the Recovery Act."
Gregory Korte reports for USA Today.