More funding needed to prosecute pandemic fraud

WASHINGTON>> More resources are needed to investigate and prosecute individuals who stole billions in pandemic relief funds, the Justice Department said in a report last week.

Federal officials said they have made “significant progress” in going after fraud but conceded that “substantial work remains in the face of numerous challenges.”

Agencies responsible for pursuing pandemic fraudsters have been restrained by budget cuts, according to the report.

The federal government, which distributed trillions in relief funds after the onset of the pandemic, has charged more than 3,500 defendants with offenses related to pandemic fraud, according to the report. That’s up from about 3,100 defendants who had been charged as of August. More than $ 1.4 billion in fraudulently obtained funds have been seized or forfeited.

Most cases have involved the Paycheck Protection Program, the Economic Injury Disaster Loan program and expanded unemployment benefits.

Although the amount of stolen funds is unknown, the Small Business Administration’s inspector general estimated that more than $ 200 billion — or at least 17% of the $ 1.2 trillion in pandemic loans the agency awarded — was distributed to “potentially fraudulent actors.”

The Government Accountability Office said that as much as $ 135 billion of the $ 900 billion in unemployment benefits distributed from April 2020 to May 2023 likely was claimed illegally.

Although most pandemic relief programs largely have ended, Justice Department officials said that state workforce agencies continue to provide additional data that could be analyzed for leads.

Some stolen relief funds also “remain restrained in bank accounts and need to be forfeited,” according to the report.

“The Justice Department is committed to continuing our efforts to investigate and prosecute pandemic relief fraud,” Attorney General Merrick Garland said.

The report also warned that cases could become harder to prosecute given the statute of limitations, which ranges from five to 10 years. The department is calling on lawmakers to pass legislation that would apply the 10- year statute to all pandemic fraud- related offenses.

“The statute of limitations must be extended and the necessary funding and data analytic tools secured for our prosecutors to recover hundreds of millions of dollars more in fraud proceeds,” Deputy Attorney General Lisa Monaco said in a statement.

White House officials have urged lawmakers to provide additional funding to help law enforcement officials prosecute cases. On Tuesday, three Democratic senators introduced legislation that would, among other things, provide $ 300 million to help the Justice Department beef up enforcement.

Responding to the wave of pandemic fraud also has made federal officials “keenly aware of the need for a permanent, interagency body” to combat government benefits fraud, given that some fraudsters appear to be applying the criminal skills and tools they acquired during the pandemic to continue to attack programs, according to the report.