The Justice Department announced the results of a coordinated, nationwide enforcement action to combat COVID-19 fraud, which included 718 enforcement actions – including federal criminal charges against 371 defendants – for offenses related to over $836 million in alleged COVID-19 fraud.
Deputy Attorney General Monaco also announced the launch of two additional COVID-19 Fraud Enforcement Strike Forces: one at the U.S. Attorney’s Office for the District of Colorado, and one at the U.S. Attorney’s Office for the District of New Jersey. These two strike forces add to the three strike forces launched in September 2022 in the Eastern and Central Districts of California, the Southern District of Florida, and the District of Maryland.
Michael C. Galdo, Acting Director of COVID-19 Fraud Enforcement, detailed the results of the three-month coordinated law enforcement action that took place from May through July 2023, which included criminal, civil, and forfeiture actions. More than 50 U.S. Attorneys’ Offices, including the COVID-19 Fraud Enforcement Strike Forces, the Justice Department’s Criminal and Civil Divisions, and more than a dozen law enforcement and OIG partners worked together to conduct the sweep.
Galdo also said that 63 of the defendants had alleged connections to violent crime, including violent gang members also accused of using pandemic funds to pay for a murder for hire. Twenty-five defendants have alleged connections to transnational crime networks.
718 law enforcement actions occurred, including criminal charges, civil charges, forfeitures, guilty pleas, and sentencings, with a combined total actual loss of more than $836 million. Criminal charges were filed against 371 defendants, and 119 defendants pleaded guilty or were convicted at trial during the sweep. Over $57 million in court-ordered restitution was imposed. 117 civil matters occurred during the sweep, with over $10.4 million in judgments. Prosecutors worked with law enforcement to secure forfeiture of over $231.4 million.
Many of the cases in the enforcement action involve charges related to pandemic unemployment insurance benefit fraud and fraud against the two largest pandemic Small Business Administration programs: the Paycheck Protection Program and Economic Injury Disaster Loans. Additional matters involved pandemic healthcare billing fraud, fraud against the Emergency Rental Assistance program, and fraud committed against the IRS Employee Retention Credit program (ERC), a refundable tax credit for businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic. IRS Criminal Investigations (IRS-CI) worked with the California Strike Force and the U.S. Attorney’s Office for the District of New Jersey to bring multimillion dollar ERC fraud cases during the enforcement action.
In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force (CFETF) to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.
The cases were investigated by the following agencies: FBI; U.S. Secret Service; IRS-CI; Defense Criminal Investigative Service; Homeland Security Investigations; U.S. Postal Inspection Service; Army Criminal Investigations Division; Food and Drug Administration’s Office of Criminal Investigations; the Diplomatic Security Service; and the Offices of Inspectors General from the Small Business Administration, Department of Labor, Department of Homeland Security, Federal Deposit Insurance Corporation, Department of Health and Human Services, Department of Veterans Affairs, Federal Housing Finance Agency, Federal Reserve Board, Social Security Administration, the Special Inspector General for Pandemic Relief, Treasury, and the Treasury Inspector General for Tax Administration.
OCDETF Fusion Center and OCDETF’s International Organized Crime Intelligence and Operations Center, the Pandemic Response Accountability Committee, the Financial Crimes Enforcement Network, and the National Unemployment Insurance Fraud Task Force provided key support.