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Federal Dragnet Ensnares Hundreds in COVID-19 Relief Fraud Charges

S.J. Steinhardt
Published Date:
Aug 24, 2023


A federal sweep has resulted in criminal charges against 371 defendants and a total of 718 enforcement actions related to more than $836 million in alleged COVID-19 fraud, the U.S. Department of Justice (DOJ) announced.

The results of a coordinated, nationwide enforcement action from May through July, the 718 law enforcement actions included criminal charges, civil charges, forfeitures, guilty pleas and sentencings. Of the criminal charges filed against the 371 defendants, 119 pleaded guilty or were convicted at trial during the sweep. More than $57 million in court-ordered restitution was imposed. In addition, 117 civil matters occurred during the sweep, with more $10.4 million in judgments. Prosecutors worked with law enforcement to secure forfeiture of over $231.4 million.

“The Justice Department has now seized over $1.4 billion in COVID-19 relief funds that criminals had stolen and charged over 3,000 defendants with crimes in federal districts across the country,” Attorney General Merrick B. Garland said in the announcement. “This latest action … should send a clear message: the COVID-19 public health emergency may have ended, but the Justice Department’s work to identify and prosecute those who stole pandemic relief funds is far from over.”

As part of the announcement, Michael C. Galdo, acting director of COVID-19 fraud enforcement, said that 63 of the defendants had alleged connections to violent crime, including violent gang members also accused of using pandemic funds to pay for a murder for hire. Twenty-five defendants have alleged connections to transnational crime networks.

The DOJ has filed charges or at least launched investigations related to roughly $8.6 billion in alleged coronavirus aid fraud since the start of the pandemic, The Washington Post reported.

A series of coronavirus aid packages totaling roughly $5 trillion was approved by Congress to cushion the economy from the effects of the pandemic. The amount of money, the haste with which it was distributed, and mismanagement on the part of both the federal and state governments resulted in waste, fraud and abuse that law enforcement officials are now beginning to identify, the Post reported.

Many of the cases in the enforcement action involve charges related to pandemic unemployment insurance benefit fraud and fraud against the two largest pandemic Small Business Administration (SBA) programs: the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).

Earlier this summer, the SBA’s inspector general found that more than $200 billion in PPP and EIDL loans had been stolen or otherwise disbursed to fraudsters. In February, the U.S. Department of Labor (DOL)’s inspector general told a congressional committee that as much as $191 billion in pandemic unemployment benefits may have been stolen.

To learn more about fraud investigations, attend the Foundation for Accounting Education's Forensic Accounting: Fraud Investigations Webcast on Oct. 23.

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