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Prosecutors Strategize Ways to Deal With Mass Pandemic Fraud

Federal prosecutors are working to recoup billions of dollars in pandemic aid from people who falsely obtained funds from government programs that were intended to keep the economy afloat during COVID shutdowns. In some districts, prosecutors are screening those suspected of a violent crime for potential involvement in pandemic fraud schemes. Other investigators are putting together “strike force teams” to unravel the most sophisticated enterprises or leaning on local officials to steer them toward potential fraudsters in their areas. The moves come as the federal government looks for new ways to root out what officials say was an enormous number of fraudulent claims that were submitted and approved during the pandemic, the New York Times reports. Many of the programs that were set up to dole out relief money required minimal proof from those seeking funds and approved applications quickly in order to pump money into the economy.

While the exact amount stolen is unknown, the Small Business Administration’s inspector general estimated that more than $200 billion was disbursed to “potentially fraudulent actors.” Nearly $30 billion has been seized or returned to the agency. Thousands of investigations are still underway. The Labor Department’s inspector general has about 160,000 open investigations focused on unemployment-insurance fraud from the pandemic. With the sheer amount of fraud, rooting out those who defrauded pandemic-relief programs has proved difficult. The federal government has charged more than 2,230 defendants with schemes and offenses related to pandemic fraud. More than 550 convictions have been recorded related to fraud involving funds from the Paycheck Protection Program and the Economic Injury Disaster Loan program, according to the SBA Office of Inspector General. Michael Galdo, acting director of COVID-19 fraud enforcement at the Justice Department, said there was a “wide variety of different approaches across U.S. Attorney’s offices,” which have freedom to determine the most effective way to catch fraudsters.


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