U.S. Attorney General Merritt Garland announced the creation of the COVID-19 Fraud Enforcement Task Force to coordinate and focus federal law enforcement resources toward detecting, investigating, and prosecuting all forms of fraud related to the COVID pandemic. In a memorandum issued to member agencies, Garland stated that the Department of Justice (“DOJ”) effort will use “every available federal tool,” including criminal, civil, and administrative actions, to combat and prevent COVID-related fraud and recover illegally obtained funds.
The task force will combat everything from fake vaccines and counterfeit masks; to Paycheck Protection Program (“PPP”) loan applications using inflated payroll figures; to Small Business Administration (“SBA”) loan applications using shell companies and multiple entities to hide and multiply potential benefits; to fraudulent goods and services sold to the federal government; and numerous other pandemic related frauds.
The Task Force, headed by Deputy Attorney General Lisa Monaco, consists of elements of the DOJ, including all U.S. Attorneys, the FBI, the Organized Crime/Drug Enforcement Task Force (OCDETF), the DOJ Inspector General, the National Unemployment Insurance Fraud Task Force, and INTERPOL Washington. It also includes the Offices of Inspectors General for the Departments of Labor, Treasury (IRS), the Small Business Administration (“SBA”), Homeland Security (“DHS”), Social Security, the FDIC, Health & Human Services (“HHS”), Veterans’ Affairs (“VA”), Housing Finance (“HFA”), the Federal Reserve; as well as the Defense Criminal Investigative Service, the FDA, Homeland Security Investigations, IRS–Criminal Investigations, the Postal Inspection Service, the Secret Service, Treasury Inspector General for Tax Administration, Treasury’s Financial Crimes Enforcement Network, the Special Inspector General for Pandemic Relief, and the Pandemic Response Accountability Committee (“PRAC”). PRAC in particular provides independent oversight of federal relief funds and recently formed its own task force to use data analytics to detect and investigate fraud.
Over the last year, the DOJ has charged nearly 600 defendants across the country with crimes involving more than $600 million. Law enforcement agencies like to publicize high-profile cases involving defendants who used ill-gotten funds to support spending sprees and lavish lifestyles. Not so highly publicized are the many defendants who mistakenly submitted incorrect loan applications or whose efforts to secure maximum benefits for their employees and businesses were legitimate but drew the attention of overzealous law enforcement.
The U.S. Sentencing Guidelines for economic crimes such as fraud expose defendants to increasing levels of potential jail time based on the amount of funds at issue, from potentially non-custodial probationary sentences, scaling up to the statutory maximum penalties of 20 years or more.
If you or someone you know may be under investigation or have been charged with COVID-related fraud offenses, seek the representation of criminal defense attorneys who are experienced with fraud-related matters and knowledgeable of the latest developments in law enforcement.