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DOJ Smackdown of COVID-19 Fraud

Posted  August 25, 2023

On Wednesday (August 23), the Department of Justice (DOJ) announced significant progress in its ongoing effort to combat COVID-19 fraud.  The agency reported a nationwide, coordinated three-month sweep resulting in more than 700 enforcement actions involving hundreds of defendants, covering more than $800 million in alleged COVID-19 fraud.

According to the government, these actions largely involved going after those that pilfered from some of the key programs designed to provide economic relief during the pandemic.  These included the Pandemic Unemployment Insurance Benefit program, the Paycheck Protection Program, and the Economic Injury Disaster Loan program.  Additional matters involved pandemic healthcare billing fraud, fraud against the Emergency Rental Assistance program, and fraud committed against the IRS Employee Retention Credit program.

The sweep targeted a wide range of criminal activity too.  Dozens of defendants have connections to violent crime, including violent gang members accused of using pandemic funds to purchase guns and drugs and also solicit murder for hire.  Many also have alleged connections to transnational crime networks, including four members of an international organized pandemic relief fraud and money laundering scheme involving Nigeria.

According to Attorney General Merrick B. Garland, with this latest sweep, “the Justice Department has now seized over $1.4 billion in COVID-19 relief funds that criminals had stolen and charged over 3,000 defendants with crimes in federal districts across the country.”  He trumpeted the “clear message” he hoped this most recent enforcement action would send that “the COVID-19 public health emergency may have ended, but the Justice Department’s work to identify and prosecute those who stole pandemic relief funds is far from over.”

Deputy Attorney General Lisa Monaco echoed this sentiment at a roundtable meeting of senior Justice Department officials, law enforcement partners, and Office of Inspector General (OIG) executives:

Our work is far from done.  We will continue to prosecute those who have committed pandemic relief fraud, at home and abroad.  . . .  Make no mistake.  Our campaign to address pandemic relief fraud is not limited to a 3-month sweep of arrests, seizures, and prosecutions.

Michael C. Galdo, Acting Director of COVID-19 Fraud Enforcement, demonstrated a similar resolve, stressing “this announcement is not a victory lap,” the government’s “mission is not complete” and how committed DOJ is “to using our criminal, civil, and forfeiture tools to hold these fraudsters accountable.”

Of course, there is only so much the government can do alone.  It needs the help of whistleblowers with inside information who can assist the government with its enforcement efforts.  The False Claims Act provides the perfect vehicle for this kind of private assist.  The statute authorizes individuals (and companies) to bring lawsuits on behalf of the government for fraud committed against the government.  In return, successful whistleblowers can receive up to 30 percent of any recovery.

The government has recovered tens of billions of dollars under the False Claims Act over the past twenty years, with whistleblowers responsible for the vast majority of these actions.  In turn, whistleblowers collectively have received a sizeable chunk of these recoveries in whistleblower awards under the statute.  It is no surprise that whistleblowers also have initiated numerous actions involving pandemic relief fraud.  All part and parcel of the private-public partnership the False Claims Act promotes in government fraud enforcement.

So if you have any information relating to COVID-19 fraud, or any other kind of fraud against the government — especially involving healthcare fraud or government contracting fraud — the government has made it very clear it wants your help.  If you would like to learn more about the False Claims Act or what it means to be a whistleblower more broadly, please feel free to contact us for a free and confidential consult with a member of our experienced whistleblower lawyer team.

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Tagged in: Contract Non-Compliance, COVID-19, FCA Federal, Healthcare Fraud, Whistleblower Eligibility,