The COVID-19 pandemic, which placed unprecedented demands on federal financial assistance programs, also presented ripe opportunities for fraudsters and swindlers to exploit the system.
A
report released by the Department of Justice (DOJ) COVID-19 Fraud Enforcement Task Force uncovered a shocking scope of fraud during the pandemic, with over $400 billion in emergency funding either stolen or misappropriated.
According to the report, fraudulent claims and schemes targeted various pandemic relief efforts, including unemployment insurance benefits, Paycheck Protection Program (PPP) loans, and Economic Injury Disaster Loans (EIDLs), among others.
These included fraudulent claims filed using stolen identities, inflated payroll expenses, doctored bank statements, and false tax forms.
The report reveals that fraudsters and swindlers may have stolen upwards of $280 billion in emergency funding, with an additional $123 billion lost or misappropriated, totaling more than $400 billion in funds intended to aid Americans during one of the most challenging times in recent history,
The Politics Brief reported.
Here are some examples of COVID-19 fraud cases:
A defendant was sentenced to seven years in federal prison for committing PPP, EIDL, and UI fraud, with actual losses of more than $1 million and attempted losses of $3 million. When the government executed search warrants in the case, agents recovered stolen identifying information and ghost guns, including one modified to function as a machine gun.
A defendant pleaded guilty to submitting more than $3.5 million in fraudulent COVID-19 PPP and EIDL applications and using fraudulently obtained funds to pay for a vacation, a Mercedes-Benz, jewelry, and luxury goods, including items from Luis Vuitton, Neiman Marcus, Dior, Cartier, Gucci, Chanel, and Hermes.
The SDFL indicted 17 employees of the Broward Sheriff’s Office were charged with obtaining fraudulent PPP/ EIDL loans. One former deputy was recently convicted at trial, several employees have pleaded guilty, and other defendants’ cases are still pending.
A defendant was sentenced to 71 months in prison for fraudulently obtaining PPP and EIDL loans and Shuttered Venue Operator Grants (SVOG), using the stolen funds to buy two Tesla S models, a Lamborghini, a Porsche, a diamond Audemars Piguet watch, a rose gold and diamond pendant with his company’s logo, a half-kilogram gold chain with 70 carats of diamonds, and a 1-kilogram gold chain.
A former contract detention officer at the federal Krome Detention facility who was the leader of a PPP fraud ring was sentenced to 32 months in prison for preparing fraudulent PPP applications in return for kickbacks.
A defendant was sentenced to 70 months in prison for laundering the over $2 million in fraudulently obtained PPP and EIDL loans and using the funds to gamble and to pay for cosmetic surgery, a Cadillac Escalade, and a Pomeranian puppy.
In the Southern District of Georgia, a Florida-based attorney was convicted at trial of conspiracy to fraudulently obtain almost $800,000 in Economic Injury Disaster Loans for herself and others.
In the Western District of Washington, the ringleader of a $6.8 million pandemic fraud ring was sentenced to five years in prison for fraudulently seeking funds from various relief programs.
In the Eastern District of Washington, an Arkansas-based business owner pleaded guilty to fraudulently receiving more than $16.5 million in SBApandemic relief funds for himself and others.
In the Eastern District of Virginia, a former VA nurse was sentenced to 18 years in prison for conspiring to fraudulently obtain more than $3.5 million in UI benefits from at least five states. She and her co-conspirators filed more than 220 false applications for unemployment insurance benefits using stolen identities and the identities of state and federal prison inmates.
In the Middle District of Florida, a defendant was sentenced to eight years and six months in prison for obtaining more than $7.2 million in PPP loan funds, which he used to purchase Maserati and Mercedes-Benz cars and buy a 12-acre estate.
The District of Minnesota has brought charges against more than 50 individuals for their respective roles in a $250 million fraud scheme that exploited a federally funded child nutrition program during the COVID-19 pandemic.
In the Eastern District of Michigan, a man was sentenced to 15 years in prison for his role as the ringleader of conspiracies to use stolen identities to fraudulently obtain $2.1 million in unemployment insurance benefits from multiple states and to traffic in methamphetamine.
The DOJ’s COVID-19 Fraud Enforcement Task Force has made significant strides in combating this fraud, with over 3,500 defendants criminally charged with more than $1.4 billion in fraudulently obtained CARES Act funds seized or forfeited and more than 400 civil settlements and judgments.
However, the sheer magnitude of the fraud indicates that much work remains to be done.
The Gateway Pundit previously reported that Paul Pelosi, who has an 8.1 percent share of restaurant company EDI Associates, received loans of more than $1.7 million from the federal government, which won’t have to be repaid.
This one holds a special place in my ❤️
@SpeakerPelosi ‘s husband Paul Pelosi took some PPP loans as well even though him and his wife do absolutely excellent in the stock market and both also have two full time careers. Clearly they needed it…
pic.twitter.com/lMVDb6HpwL
— . ☠️ (@RealDotFren)
August 21, 2022
EDI Associates was given two loans – one for $711,708 and the other for $996,392.
As the database shows, both loans have been forgiven. As noted by the Daily Mail, the decision to forgive a loan is based upon a formula that takes into account the number of employees retained and their wages.
You can read the full report from the DOJ below:
