The Department of Justice (DoJ) announced on Wednesday that it has seized over $1.4 billion in COVID-19 relief funding stolen by criminals since the start of the pandemic, with over $200 million recovered in the past three months.
The DoJ said it has brought criminal charges against nearly 3,200 defendants with over $1.7 billion in alleged losses.
“The Justice Department has now seized over $1.4 billion in COVID-19 relief funds that criminals had stolen and charged over 3,000 defendants with crimes in federal districts across the country,” Attorney General Merrick Garland said in a press release. “This latest action, involving over 300 defendants and over $830 million in alleged COVID-19 fraud, should send a clear message: the COVID-19 public health emergency may have ended, but the Justice Department’s work to identify and prosecute those who stole pandemic relief funds is far from over.”
The announcement was first made by Deputy Attorney General Lisa Monaco at the COVID-19 Fraud Enforcement Task Force Roundtable Meeting on Wednesday.
During the meeting, Monaco also announced the establishment of two additional COVID Fraud Enforcement Strike Force teams: 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 new teams are in addition to the three strike forces launched in Sept. 2022 in the Eastern and Central Districts of California, the Southern District of Florida, and the District of Maryland.
“I am proud of what our prosecutors and each of the investigative partners represented here today have accomplished together,” Monaco said during the meeting. “We’ll stay at it for as long as it takes. Our efforts to pursue those who chose to defraud and steal in a time of national emergency will continue.”
This summer, the three original strike forces collaborated on a three-month, nationwide COVID-19 fraud enforcement sweep. During the sweep, Monaco said the DoJ undertook more than 700 enforcement actions involving over $830 million in fraud, seizing over $200 million through criminal and civil forfeiture actions.
According to the DoJ, many of the cases in the enforcement action involve charges related to pandemic unemployment insurance (UI) benefit fraud and fraud against the Small Business Administration’s (SBA) pandemic assistance loan programs: the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).
Congress created four new UI programs during the pandemic, and evidence suggests the total amount of fraud in these programs was over $60 billion – and could be much higher.
As for the SBA fraud, the SBA Office of Inspector General (OIG) estimates that of the $1.2 trillion SBA disbursed through its pandemic assistance loan programs, over $200 billion was potentially fraudulent. This means that at least 17 percent of all COVID-19 EIDL and PPP funds were potentially fraudulent – specifically, more than $136 billion COVID-19 EIDLs and $64 billion in PPP funds.
“Agency decisions in the early months of the pandemic that prioritized speed over accuracy in delivery of relief funds led to brazen fraud and outright theft of millions of dollars,” Michael E. Horowitz, chair of the Pandemic Response Accountability Committee (PRAC), said in a statement following the DoJ’s meeting on Wednesday.
“To protect taxpayer funds, the PRAC created a shared data analytics center that powers pandemic investigations across Federal agencies. Our data analytics platform provides law enforcement agencies with critical data, sophisticated technical assistance, and tangible resources to help identify and investigate complex fraud schemes,” Horowitz added. “The PRAC stands ready to support the OIGs and the broader law enforcement community in their pursuit of pandemic fraud and misuse of pandemic relief funds.”
