Takeaway:
The government has increased its prosecutions of fraud related to COVID-19 funds and programs. Given the rapid development of these programs and enforcement, it is more critical than ever to ensure that the government’s evidence and theories comport with the statutory provisions of recently enacted laws.
On May 17, 2021 the United States Attorney General announced the formation of a COVID-19 Fraud Enforcement Task Force. Due to the COVID-19 pandemic, the federal government provided critical monetary relief to businesses and individuals who were impacted by the pandemic. While most Americans were honest in their application and use of those relief funds, the government alleges that others were not. The Department of Justice (DOJ) will be joining forces with other governmental agencies to step up its investigations and prosecutions of fraud by sharing information and providing additional support to its partners.
More than $2 trillion has been spent by the federal government in relief funds under the Coronavirus Aid, Relief, and Economic Security (CARES) Act including relief under the Paycheck Protection Program, the Economic Injury Disaster Loan, Economic Impact Payments, Provider Relief Fund, Pandemic Unemployment Assistance, and Federal Pandemic Unemployment Compensation. DOJ’s prosecutions of COVID-19 related fraud has been fierce. Even before this task force was created, DOJ prosecuted over 500 individuals in COVID-19 related fraud. Many of the prosecutions involved making false statements to the government or a bank in applying for the relief funds and/or misusing the funds for non-intended purposes. Wire fraud, bank fraud, making false statements to the government or bank, and money laundering are the most common charges.
Examples of the many types of fraudulent schemes subject of investigation include:
- Making false representations and/or using those funds for other than the intended purpose.
- Charitable solicitation fraud—Involves allegations that a fraudster claims to be a legitimate organization raising funds to aid victims.
- Price gauging—Involves businesses or individuals raising the cost of necessary items, such as masks.
- Fraudulent COVID vaccine and test results.
- Schemes to obtain personal, banking, and Medicare information.
- Bribes and tax fraud.
It is easy for anyone to report suspected fraud. The DOJ has a National Center for Disaster Fraud hotline in place for the public to report suspected fraudulent schemes. With the COVID-19 Task Force in place, it is suspected that the investigations and prosecutions will come at a faster pace and be more streamlined. The CARES Act went through multiple iterations and companies and individuals being investigated should test the government’s theories to ensure that the government has the evidence it requires to prosecute.
