Topline
A federal task force says it’s seized more than $1.4 billion in fraudulently obtained Covid-19 relief funds over the last three years, though it’s potentially only a fraction of the total amount of aid money stolen by fraudsters.
FILE - The Justice Department in Washington, Nov. 18, 2022. (AP Photo/Andrew Harnik, File)
Key Facts
In its annual report released Tuesday, the Department of Justice’s Covid-19 Fraud Enforcement Task Force says its members have filed charges against more than 3,500 defendants for fraudulently obtaining funding meant for pandemic relief efforts since the task force was formed in 2021—cases believed to account for total losses of more than $2 billion.
Of the 3,500 defendants charged by U.S. Attorney’s Offices around the country, 2,005 defendants have pleaded guilty or were convicted at trial—but the report says there are a “similar number of investigations open that are yet to be charged.”
Members of the task force have also secured more than 400 civil settlements and judgements totaling more than $100 million.
The money seized by the DOJ was fraudulently obtained through the Coronavirus Aid, Relief and Economic Security (CARES) Act, the landmark 2020 stimulus bill that established programs to distribute trillions of dollars in aid to individuals impacted by the pandemic.
In one example cited in the report, a Washington business owner pleaded guilty to fraudulently obtaining more than $16 million in pandemic-relief funding by applying for funding for dozens of businesses purportedly owned by him or his associates using false information—with many of the businesses inactive.
But defendants weren’t limited to business owners—the U.S. Attorney’s Office in the Southern District of Florida, for instance, prosecuted 17 employees with the Broward Sheriff’s Office for each independently fraudulently applying for pandemic relief and receiving a combined $500,000 illegally.
Key Background
The total amount of money fraudulently taken during the pandemic could amount to hundreds of billions of dollars. In 2023, the Government Accountability Office estimated that the total amount of unemployment insurance fraud during the pandemic was between $100 billion and $135 billion—accounting for 11 to 15% of the total unemployment benefits paid during the pandemic. A 2023 Associated Press investigation estimated that up to $280 billion in pandemic relief funding was obtained fraudulently, while another $123 billion was misspent or otherwise wasted. U.S. Attorney General Merrick Garland established the Covid-19 Fraud Enforcement Task Force in 2021, acknowledging at the time “it is impossible to keep all those intent on carrying out illegal COVID fraud schemes from doing so,” but vowing to work to hold “bad actors” accountable.
What To Watch For
In its report, the Covid-19 Fraud Enforcement Task Force noted significant challenges in continuing its work. It advocated, for instance, for an extension of statute of limitations on all COVID-19 fraud-related offenses, noting “in the coming years, investigative targets will increasingly argue that their conduct falls outside the statute of limitations.” In 2022, the U.S. passed legislation increasing the statute of limitations for fraud related to the so-called Paycheck Protection Program and Economic Injury Disaster Loan program from five to 10 years. Sens. Ron Wyden, D-Ore., and Mike Crapo, R-Idaho, have introduced a legislative framework to extend the statute of limitations for pandemic unemployment insurance fraud to 10 years. The Task Force also calls for the renewal of the Pandemic Response Accountability Committee, a body of 20 federal inspectors general that oversees pandemic relief spending—its funding is set to end next year.
Tangent
Later on Tuesday, Senate Democrats proposed a new $1.3 billion bill maimed at giving authorities more tools to investigate and prosecute pandemic relief fraud. The bill, which is modeled off a White House budget request, would fund new Covid-19 fraud investigative teams, provide funding to federal agencies to hire investigators that would specialize in recovering lost pandemic funds and more.
