US Claims to Have Recovered $1.4bn in COVID Fraud

A US initiative designed to crack down on COVID fraud has resulted in the seizure of $1.4bn and thousands of criminal charges in the past three years, the Department of Justice (DoJ) has revealed.

The COVID-19 Fraud Enforcement Task Force (CFETF) was set up in 2021 to tackle what is believed to be fraud on a vast scale, taking advantage of generous government loans and relief payments during the pandemic.

According to the annual CFETF report published yesterday, over 3500 defendants have now been charged with federal crimes and over 400 civil settlements and judgements have been made.

Some of the most egregious examples of fraud prosecuted by US attorneys over the past year include:

• The sentencing to five years in prison of the ringleader of a $6.5m scheme to submit fraudulent applications for the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) Program, and Coronavirus Aid, Relief and Economic Security (CARES) Act unemployment benefits
• A business owner who pleaded guilty to fraudulently receiving over $16.5m in Small Business Administration (SBA) COVID relief funds
• Charges brought against more than 50 people for their roles in a $250m scheme to exploit a federally funded child nutrition program
• The sentencing to eight-and-a-half years in federal prison of a man who fraudulently obtained over $7m in PPP funds

However, despite its successes, the CFETF has warned that it is battling a lack of resources and the statute of limitations to go after more COVID fraudsters.

“The CFETF and its member agencies have ongoing investigations into hundreds of identity thieves, transnational fraud and money laundering networks, large-dollar individual fraudsters, and the businesses that facilitated these crimes,” it argued in the report.

“If we fail to provide the necessary [Pandemic Response Accountability Committee] PRAC data to CFETF agencies or neglect to extend the statute of limitations, our agents and prosecutors won’t be able to finish the job – losing the opportunity to recoup hundreds of millions of dollars in fraud proceeds and placing our citizens and government institutions at risk of future criminal victimization.”

That’s why several senators have introduced new legislation – the Fraud Prevention and Recovery Act – modeled on White House proposals to continue the COVID-19 fraud crackdown.

Read more on COVID-19 fraud: #COVID19 Pushes More Fraud Online