The Justice Department said in a report Tuesday that more resources are needed to investigate and prosecute individuals who stole billions of dollars in pandemic relief funds.
Federal officials said they had made “significant progress” in uncovering fraud, but acknowledged that “substantial work remains to be done in the face of many challenges.” Government agencies tasked with tracking pandemic scammers are being held back by budget cuts, the report says.
The federal government, which distributed trillions of dollars in relief money after the pandemic began, has indicted more than 3,500 defendants on charges related to pandemic fraud, according to the report. This is more than the approximately 3,100 defendants indicted as of August. More than $1.4 billion in ill-gotten funds were seized or confiscated.
Most cases involve the Paycheck Protection Program, Economic Injury Disaster Loan Program, and expanded unemployment benefits.
The amount of funds stolen is unknown, but the Small Business Administration's inspector general said more than $200 billion (at least 17% of the roughly $1.2 trillion in pandemic loans the agency has made) was “potentially fraudulent.'' It is estimated that the amount was distributed to
The Comptroller's Office said up to $135 billion of the roughly $900 billion in unemployment benefits distributed between April 2020 and May 2023 may have been illegally claimed.
Although most pandemic relief programs are nearly over, Justice Department officials said they continue to provide additional data that state workforce agencies can analyze for clues. Some of the stolen relief funds “remain held in bank accounts and must be forfeited,” the report said.
“The Department of Justice is committed to continuing its efforts to investigate and prosecute pandemic relief fraud,” said Attorney General Merrick B. Garland.
The report also warned that cases could become more difficult to prosecute given the five- to 10-year statute of limitations. The department is asking lawmakers to pass legislation that would apply a 10-year statute of limitations to all crimes related to pandemic fraud.
“We need to extend the statute of limitations and ensure that prosecutors have the funding and data analysis tools they need to recover hundreds of millions of dollars in additional fraudulent proceeds,” Deputy Attorney General Lisa Monaco said in a statement.
White House officials urged lawmakers to provide additional funding to help law enforcement prosecute cases. On Tuesday, three Democratic senators introduced a bill that would, among other things, provide $300 million to help the Justice Department strengthen enforcement.
President Biden “strongly supports” legislation that would enact many of the pandemic fraud proposals he announced last year, White House officials said.
After the pandemic shut down much of the economy, the federal government distributed trillions of dollars in relief funds aimed at helping American households and small businesses recover. But in the federal government's rush to raise funds publicly, much of it was distributed with few strings attached. As a result, billions of dollars of taxpayer funds have been stolen by thousands of people, ranging from sophisticated criminals to amateur fraudsters.
Federal authorities have been trying to keep up with the wave of fraud for years. In addition to the U.S. attorney's office, hundreds of people from more than 40 inspector general offices are working on pandemic fraud investigations, including the FBI, Secret Service, Postal Inspection Service, Department of Homeland Security Investigations, and Internal Revenue Service Criminal Investigation. The same goes for employees. .
Federal prosecutors use a variety of methods to catch criminals. At the U.S. Attorney's Office in Maryland, authorities have begun screening suspects for violent crimes and illegal possession of firearms for pandemic fraud. Officials with the U.S. Attorney's Office for the Northern District of Mississippi also asked county officials to scrutinize the list of individuals who received pandemic loans.
However, given the sheer volume of fraud, rooting out those who abused pandemic relief programs has become a difficult challenge. Officials acknowledged that some petty theft cases may never be prosecuted.
In response to the wave of pandemic fraud, federal authorities are stepping up efforts to combat government benefits fraud, as some fraudsters appear to be applying criminal skills and tools learned during the pandemic to commit criminal acts. is acutely aware of the “need for a permanent interagency body.'' The report says attacks on the program continue.