Covid-19 relief was plagued by fraud. Here is the right response.

“Brazen.” That’s the key word in the Justice Department’s indictment of 47 defendants in Minnesota, alleging they siphoned nearly $250 million from a federal program meant to provide food to needy children during the pandemic. Though the accused conspirators claimed to have provided up to 125 million meals, prosecutors said they used federal dollars to buy jewelry, luxury cars, real estate and more.

The case is the largest such scheme uncovered to date — and that is just the tip of the iceberg. A Labor Department watchdog report released last week estimates that fraudsters might have stolen $45.6 billion in unemployment insurance during the pandemic. That’s on top of tens of billions of dollars potentially defrauded from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan program (EIDL), among others.

To be clear, the existence of fraud does not mean the programs were failures. But these cases offer important lessons for how governments should manage aid and loan programs going forward.