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PPP Fraud Investigations
As the beginning of the Covid-19 pandemic gets further away, more and more cases of Covid-19 Fraud are beginning to pop up. In May 2021, US Attorney General Merrick Garland created the Covid-19 Fraud Enforcement Task Force to enhance efforts to fight against Covid-19-related fraud. Today we are seeing more and more PPP fraud investigations. Federal prosecutions move slowly, so as time passes, we are more likely to see prosecution proceedings.
What is Covid-19 Fraud?
During the COVID-19 pandemic, the American government sought to help citizens throughout the United States by implementing a number of programs and benefits that would assist citizens during the course of the pandemic. While the programs aimed to offer relief and support, they became an attractive target for fraudulent activities.
Touted as the “Biggest fraud in a generation,” PPP Fraud has become the most notorious type of fraud resulting from the COVID-19 pandemic.
Prosecution of PPP Fraud
During Covid-19, the Paycheck Protection Program was an SBA-backed loan that helped businesses keep their workforce employed during the COVID-19 crisis. The purpose of the program was to provide financial assistance to small businesses, nonprofits, self-employed individuals, and independent contractors that were adversely affected by the economic impacts of the pandemic.
The allegations of PPP Fraud include identity theft, overinflating loan documents to receive higher payouts, and even, creating fake companies in order to receive funds from the program. The program authorized banks and other financial institutions to make government-backed loans to businesses, loans that were to be forgiven if the companies spent the money on business expenses.
Other Types of Covid-19 Fraud
In addition to PPP Fraud, during the COVID-19 pandemic, other types of white-collar fraud became prevalent, such as unemployment fraud, identity theft, misuse of social security numbers, and even stealing and selling COVID-19 vaccination cards.
In addition to restitution being a consequence of these fraud allegations, many of those convicted of COVID-19 fraud face time in prison. For example, in May 2023, a former Seattle resident who defrauded federal COVID-19 benefits programs of more than $1 million was sentenced to 100 months in prison for wire fraud and aggravated identity theft.
Call a Fort Worth Federal Fraud Attorney for Help
A person being targeted by a federal agency for any white-collar crime, particularly COVID-19 fraud, should seek legal representation from a Fort Worth federal mail
fraud lawyer before speaking with an agent.
If you believe you might be under investigation for any type of COVID-19-related fraud, call our firm to speak with an experienced attorney who will give you a confidential analysis of your situation and what might occur. Our team of attorneys are former state and federal prosecutors. We also have former federal agents who assist us in our own defense investigations. We have the expertise and skillset to defend even the most complex white-collar criminal cases.
Call 817-203-2220 for a free consultation with an experienced white-collar crimes attorney with Varghese Summersett.
FAQs About Covid-19 Fraud
What is COVID-19 fraud?
COVID-19 fraud refers to various deceptive schemes and scams that exploit the pandemic for financial gain. These fraudulent activities may involve the sale of fake or unapproved medical products, phishing attempts, charity scams, and fraudulent access to government relief funds, such as the Paycheck Protection Program (PPP).
What is PPP fraud, and how does it relate to COVID-19?
The Paycheck Protection Program (PPP) is a U.S. government initiative that provides forgivable loans to small businesses impacted by the COVID-19 pandemic. PPP fraud occurs when individuals or businesses intentionally misuse these funds, misrepresent their eligibility, or submit false documentation to obtain financial assistance unlawfully.
What are common types of COVID-19 fraud schemes?
Some common COVID-19 fraud schemes include fake COVID-19 treatments and cures, online shopping scams for personal protective equipment (PPE), phishing emails with malicious links or attachments, fraudulent investment opportunities related to pandemic-related products, and false charity appeals.
How are some PPP fraud cases carried out?
PPE fraud cases often stem from someone posing as a legitimate lender or loan agent, offering “guaranteed” PPP loan approvals, or requesting upfront fees for loan processing. They may also encourage applicants to provide false information on applications to maximize loan amounts or eligibility.
Are there legal consequences for COVID-19 and PPP fraud?
Yes, engaging in COVID-19 and PPP fraud is a criminal offense and can lead to severe legal consequences. Those found guilty may face fines, restitution, and imprisonment. In addition to criminal penalties, civil actions and asset forfeitures may be pursued to recover unlawfully obtained funds.
Who investigates COVID-19 fraud?
COVID-19 fraud is investigated by various law enforcement agencies and government entities, depending on the type and scope of the fraud involved. Some of the key organizations involved in investigating COVID-19 fraud include:
- Federal Bureau of Investigation (FBI): The FBI is the primary federal investigative agency in the United States responsible for handling a wide range of criminal activities, including fraud related to the COVID-19 pandemic.
- Department of Justice (DOJ): The DOJ’s Criminal Division, particularly its Fraud Section, plays a crucial role in investigating and prosecuting COVID-19-related fraud cases.
- U.S. Secret Service: The Secret Service, primarily known for protecting national leaders, also investigates financial crimes, including those related to the misuse of government relief funds like the Paycheck Protection Program (PPP).
- Department of Health and Human Services (HHS) Office of Inspector General (OIG): The HHS OIG investigates fraud related to healthcare programs and services, including fraudulent schemes involving COVID-19 treatments and medical products.
- Internal Revenue Service (IRS) Criminal Investigation: The IRS Criminal Investigation division investigates tax-related crimes, including fraud related to stimulus payments and relief funds.
- Small Business Administration (SBA) Office of Inspector General (OIG): The SBA OIG is responsible for investigating fraud related to programs administered by the Small Business Administration, including PPP fraud.
- State and local law enforcement agencies: State and local authorities may also investigate COVID-19 fraud occurring within their jurisdictions, particularly if the fraudulent activities are not limited to federal programs.
- International law enforcement cooperation: Given the global nature of some COVID-19 fraud schemes, international law enforcement agencies may also collaborate to investigate and combat transnational fraud activities.
These organizations work in coordination and often collaborate to uncover fraudulent activities, gather evidence, and prosecute individuals or entities involved in COVID-19 fraud. Additionally, they rely on tips and reports from the public to identify and investigate potential fraud cases effectively.
