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The U.S. Department of Justice has identified a wide array of fraud and criminal activities tied to more than $8 billion in federal COVID-19 aid, the department announced Thursday.
In response, the department has appointed Kevin Chambers, previously associate deputy attorney general, as chief prosecutor for COVID-19 fraud. Chambers is setting up teams to analyze “an almost shocking amount of data” and prosecute those who illegally obtained money from pandemic relief benefits, such as the Paycheck Protection Program and unemployment insurance.
“People bought vacation homes, Bentleys and Rolexes. We may not get all the money back, but that’s not the only value in bringing these cases,” Chambers told NBC News.
So far, federal prosecutors have initiated more than 1,000 criminal cases related to fraud losses of more than $1.1 billion and seized more than $1 billion in Economic Injury Disaster Loan proceeds. In addition, civil cases have been filed against 1,800 people or organizations related to more than $6 billion in pandemic relief loans.
“If folks who have stolen from the program think for a second that our work is done or they’ve gotten away with it, they’ve got another thing coming,” he added.
Chambers will focus on “large-scale criminal enterprises and foreign actors,” the department said. In some cases, loans were obtained for nonexistent companies or unauthorized purchases such as sports cars, jewelry, and home improvements, according to The Hill. Other cases involve identity theft and unemployment insurance fraud.
Last March, a judge sentenced a Texas man for seeking nearly $25 million in Payroll Protection Program loans to help businesses that didn’t have employees, according to The Washington Post . He created fake tax documents and created bank statements showing wages that were never paid to workers. He then used the money to buy luxury cars, including a Bentley convertible, a Corvette Stingray, and a Porsche Macan.
In another case, a judge sentenced a Georgia man for trying to defraud the government while obtaining small business aid, the newspaper reported, part of which he used to buy a Pokemon trading card for more than $57,000.
Last fall, a federal judge sentenced a California man to 17 years in prison for leading a fraud ring that stole $18 million in pandemic relief loans intended for small businesses, NBC News reported.
Last month, 11 members and associates of a Brooklyn gang were charged with stealing the identities of 800 people to claim more than $4 million in unemployment benefits, the news outlet reported. Court documents showed pictures of some of them posing while holding piles of cash.
The Secret Service has estimated that $100 billion was illegally obtained from relief programs, NBC News reported, and private experts have said it could be as high as $400 billion. The U.S. government spent $5 trillion in pandemic-related funds, Chambers said, “so the numbers are going to be big.”
“In a very real sense, people were hurt. Because of this fraud, there are people who didn’t get the loans that might have paid for their kids’ tuition for another year,” he told NBC News. “This was not an endless amount of money. If a person gets it through fraud, that is money that would have gone to someone who needed it, was entitled to it, but didn’t get it.”
U.S. Department of Justice: “Justice Department Announces Director for COVID-19 Fraud Enforcement.”
NBC News: “New Covid fraud prosecutor steps up effort to convict people who stole billions in relief benefits.”
The Hill: “DOJ finds more than $8 billion in COVID aid fraud.”
The Washington Post: “Justice Department reports more than $8 billion in alleged fraud tied to federal coronavirus aid programs.”
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