Stimulus Fraud

Earlier this year, Congress was quick to pass the American Recovery and Reinvestment Act, or stimulus bill that promised to jumpstart the economy and put Americans back to work by spending $787 billion on “shovel-ready” projects across the country.

The nation’s economic condition demanded fast action. Yet, as recent statistics have shown, the jobs that may have been created or saved from the stimulus are not offsetting the millions of jobs that the US economy is still hemorrhaging.

Did congress choose the wrong approach to stimulating the economy by spending money the American economy does not have on things they don’t need? And is the US Government facing further internal challenges that threaten this recovery plan?

Earlier this month, FBI Director Robert Mueller warned the nation to brace for a potential crime wave involving fraud and corruption related to the economic stimulus package. "hese funds are inherently vulnerable to bribery, fraud, conflicts of interest, and collusion. There is an old adage, that where there is money to be made, fraud is not far behind, like bees to honey,"

According to David Williams, who runs Deloitte Financial Services Advisory and counsels clients on fraud prevention, swindlers, con men, and thieves could siphon off as much as $50 billion of the government's planned stimulus package as the money begins flooding the economy in coming months.

Williams has predicted that about $500 billion of the total $787 billion stimulus would be channeled into the traditional procurement network for government contracts, while the rest will be spent directly by the government or outside the corporate network.

"The rule of thumb typically is that of the about $500 billion worth of money that's going to run through the procurement process, somewhere between 5% and 10% of that usually finds it way into potential problems," Williams said. "That's sort of the benchmark that I use."

Earlier this month, Vice President Joe Biden said some stimulus-related scams had already happened and that some mistakes were inevitable. President Barack Obama said Monday that the White House is trying to make sure the stimulus money isn't being ill-spent.

He said many of the safeguards and transparency measures "so far seem to have worked" but added his administration will have to stay vigilant.

"At a time when everybody is tightening their belts, the last thing the American people want to see is that any of this money is being wasted," Obama said.

Obama has said that the White House will keep trying to make sure citizens know where the stimulus money is going. "We're going to do it continuing to operate in a transparent fashion so that taxpayers know this money is not being wasted on a bunch of boondoggles,".