The Department of Justice today announced an update on criminal and civil enforcement efforts to combat COVID-19 fraud, including programs for the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) and Unemployment Insurance (UI) programs .
To date, the Department of Justice has publicly charged 474 defendants with criminal offenses based on fraud programs related to the COVID-19 pandemic. These cases involve attempts to get over $ 569 million from the US government and unsuspecting people through fraud and have been brought to 56 federal districts across the country. These cases reflect a level of reach, coordination and expertise that is critical to the enforcement efforts against fraud related to COVID-19, and also symbolizes the Department of Justice's response to criminal misconduct.
"The Department of Justice has led a historic enforcement initiative to detect and disrupt fraud programs related to COVID-19," said Attorney General Merrick B. Garland. “The impact of the division's work to date sends a clear and unmistakable message to those who would exploit a national emergency to steal taxpayer-funded resources from vulnerable individuals and small businesses. We are committed to protecting the American people and the integrity of the critical lifelines provided by Congress, and we will continue to respond to this challenge. "
"For anyone thinking of using the global pandemic as an opportunity to defraud and steal hardworking Americans, my advice is simple – not," said Assistant Attorney General Nicholas L. McQuaid of the Department of Justice's Criminal Investigation Department. "No matter where you are or who you are, we will find you and prosecute you to the fullest extent of the law."
"We will not allow American citizens or the critical aid programs created to support them to be persecuted by those who seek to exploit this national emergency," said Assistant Attorney General Brian M. Boynton of the Department of Justice's civil division. "We pride ourselves on working with our law enforcement partners to hold wrongdoers accountable and protect tax dollars."
In March 2020, Congress passed a $ 2.2 trillion economic relief bill known as the Coronavirus Aid, Relief and Economic Security (CARES) bill that will affect millions of Americans among those affected by the COVID 19 suffered economic impact, emergency financial aid is to be provided pandemic. In anticipation of the need to protect the integrity of these tax dollars and otherwise protect Americans from fraud related to the COVID-19 pandemic, the Department of Justice immediately engaged in several efforts to identify, investigate, and prosecute such fraud follow. The Department of Justice's response to fraud related to COVID-19 leverages data analytics capabilities and partnerships born from its longstanding experience fighting white-collar crime and fraud in government programs and serves as a model for proactive, effective enforcement of employees and demonstrates our agility in response to new and emerging threats. This quick and nationwide response enabled the Justice Department to quickly ensure accountability for wrongdoing in a national crisis and sent a strong message of deterrence during an ongoing crisis. The multi-faceted, cross-district approach to enforcement during this national health emergency continues and is expected to result in numerous additional criminal and civil enforcement actions in the coming months.
In criminal matters, the Department of Justice's efforts to combat fraud programs related to COVID-19 continued on a number of fronts, including:
- Paycheck Protection Program (PPP) scams: The division's efforts have centered on cases filed by the Fraud Division of the Criminal Investigation Department that involved at least 120 defendants charged with PPP fraud. The cases encompass a range of behaviors, from individual business owners who raised their labor bills to get bigger credit than they would otherwise have qualified, to serial scammers who revived dormant businesses and bought shell businesses with no actual business, to apply for multiple loans falsely stated that they had a sizeable payroll and organized criminal networks filing identical loan applications and receipts under the names of different companies. Most of the accused defendants have misused loan proceeds for prohibited purposes such as buying homes, cars, jewelry, and other luxury goods. In one case, United States v Dinesh Sah, in the northern district of Texas, the defendant applied for 15 different PPP loans from eight different lenders using 11 different companies for a total of $ 24.8 million. The defendant received approximately $ 17.3 million and used the proceeds to purchase several homes, jewelry, and luxury vehicles. In another case, eight defendants filed a petition against Richard Ayvazyan et al. In the Central District of California 142 over $ 21 million PPP and EIDL loans using stolen and fictitious identities and bogus businesses and laundering the proceeds from bank accounts to the purchase of real estate, stocks and jewelry via the Internet.
- Economic Injury Disaster Loans (EIDL) fraud: The department has also focused on fraud against the EIDL program, which seeks to provide loans to small businesses, agricultural and nonprofit organizations. Fraudsters have targeted the program by requesting EIDL advances and loans to ineligible start-up, shell or non-existent businesses and diverting the funds for illegal purposes. The department responded, largely through the efforts of the Colorado District Attorney's Office and its US intelligence partners to act swiftly to seize loan proceeds from fraudulent applications. To date, $ 580 million has been seized and seized. The Colorado EIDL Fraud Task Force, comprised of staff from five law enforcement agencies and prosecutors, investigates a wide range of suspected fraudulent loans and their claimants. It works to identify individual criminals and networks of scammers who are suitable for law enforcement.
- Unemployment Insurance (UI) fraud: Due to the COVID-19 pandemic, more than $ 860 billion in federal funding was allocated for UI services through September 2021. Early research and analysis shows that internationally organized criminal groups have targeted these means by using stolen identities to apply for UI services. Domestic scammers, from identity thieves to prison inmates, have also committed UI fraud. In response, the department created the National Unemployment Insurance Fraud Task Force, a prosecutor-led, multi-agency task force that includes representatives from more than eight different federal law enforcement agencies. In addition, the department is hiring US assistant attorneys at several US law firms that focus on prosecuting UI fraud. Since the pandemic began, over 140 defendants have been charged and arrested on federal criminal offenses related to UI fraud. In one case, US v. Leelynn Danielle Chytka, in the western district of Virginia, a defendant recently pleaded guilty to her role in a system that successfully stole more than $ 499,000 in UI benefits using people's identities that are not eligible for the UI, including a prisoner number.
As part of the department's ICHIP (International Computer Hacking and Intellectual Property) program, ICHIP consultants have provided assistance and case-based mentoring to foreign colleagues around the world to help detect, investigate and prosecute fraud related to the pandemic. The ICHIPs have helped their peers fight cyber-enabled crime (e.g. online fraud) and intellectual property crime, including fraudulent and mislabeled COVID-19 treatments and the sale of counterfeit medicines. ICHIPs ran webinars for foreign prosecutors and law enforcement agencies in Asia, Africa, Europe, and South America to learn how to remove fraudulent COVID-19 websites. These webinars discussed methods of finding the registrar for a specific domain and requesting a voluntary shutdown, as well as the US legal process required to obtain a court order that would bind a US registrar. This has resulted in the removal of several online COVID-19 fraud cases and the seizure of counterfeit medicines and medical supplies such as masks, gloves, hand sanitisers and other illegal goods.
The department has also taken action to combat coronavirus-related fraud programs targeting American consumers. With scammers around the world trying to sell counterfeit and unlawful medicines, treatments, and personal protective equipment, the department has launched dozens of civil and criminal enforcement actions to ensure the health and economic safety of Americans. The department has pursued or secured civil orders against dozens of defendants who have sold products – including bleach, ozone gas, vitamin supplements, and colloidal silver ointments – by making false or unapproved claims about the products' ability to prevent or treat COVID-19 – Have used infections. The department has also worked to shut down hundreds of fraudulent websites that enabled consumer fraud, and it has taken numerous measures to disrupt financial networks that support such scams. The department also coordinates with numerous agency partners to prevent and prevent vaccine-related fraud.
The division also uses a variety of civilian tools to combat fraud related to CARES Act programs. For example, in the Eastern District of California, the division received the first civil settlement for fraud related to the Paycheck Protection Program, which provides civil claims under the Financial Institution Reform, Recovery, and Enforcement Act (FIRREA) and the False Claims Act (FCA) They were resolved by an Internet retail company and its President and Chief Executive Officer, based on false statements made to federally insured banks to influence these banks to approve a PPP loan, and the SBA to guarantee this. FIRREA allows the government to impose civil sanctions for violations of the federal criminal laws listed, including those affecting federally insured financial institutions. The FCA is the government's primary civilian tool for correcting false claims to federal funds and property that affect a variety of government operations and functions. The FCA allows individuals with knowledge of the government fraud to file a lawsuit on behalf of the United States and participate in any recovery action. Such whistleblower complaints have increased as unscrupulous actors exploit the vulnerabilities created by the COVID-19 pandemic and the new government programs to pay out federal aid, and whistleblower cases continue to be a major source of new clues about the abuse exterminate and abuse taxpayers' money.
Indictments and other criminal charges referenced above are merely accusations and all defendants are presumed innocent until finally found guilty in a court of law.
The unprecedented pace and pace of this endeavor is made possible only by the diligent work of a wide variety of Justice Department partners, including the Criminal Investigation Department's Anti-Fraud and Asset Reclamation Department, the Civilian Department's Commercial Disputes (Fraud Department) and Consumer Protection, US law firms across the country and law enforcement partners of the FBI, the Inspector General's Department of Labor, US Intelligence, the IRS Criminal Investigation Service, the Defense Crime Investigation Service, the Homeland Security Investigations and the US Postal Inspection Service, the Inspectors General's Offices Small Business Administration, Department of Homeland Security, Social Security Administration, Federal Deposit Insurance Corporation, Department of Health and Human Services, Department of Veteran Angling Federal Housing Finance Agency and Federal Reserve Board, Food and Drug Administration Bureau for Criminal Investigations, Inspector General for Tax Administration of the Treasury Department, Financial Crime Enforcement Network, Special Inspector for Pandemic Relief, Committee on Pandemic Accountability, the OCDETF Fusion Center and the International Organized Crime Intelligence and Operations Center of OCDETF.
For more information on the department's COVID response, please visit: https://www.justice.gov/coronavirus. For more information on the Criminal Police Department's enforcement efforts regarding PPP fraud, including court documents from key cases, please visit the following website: https://www.justice.gov/criminal-fraud/ppp-fraud. For more information on the Civil Department's enforcement efforts, please visit the following website: https://www.justice.gov/civil.
Contact the National Center for Disaster Fraud (NCDF) by calling the NCDF hotline at 1-866-720-5721 or using the NCDF web complaint form at: https://www.justice.gov/disaster- fraud / ncdf-disaster-complaint-form.