DOJ Charges 474 With COVID-Related Fraud in the Past Year

The seal of the United States Department of Justice is seen on the building exterior of the United States Attorney's Office of the Southern District of New York in Manhattan, N.Y., on Aug. 17, 2020. Andrew Kelly/Reuters

The Department of Justice announced it has charged nearly 500 people with engaging in COVID-19 scams worth hundreds of millions of dollars.

“The Department of Justice (DOJ) has led a historic enforcement initiative to detect and disrupt COVID-19 related fraud schemes,” Attorney General Merrick Garland said in a news release on Friday, referring to the disease caused by the CCP (Chinese Communist Party) virus. “The impact of the department’s work to date sends a clear and unmistakable message to those who would exploit a national emergency to steal taxpayer-funded resources from vulnerable individuals and small businesses.”

The agency charged 474 defendants with engaging in criminally fraudulent schemes and attempted to obtain over $569 million from the federal government as well as unsuspecting victims.

“We are committed to protecting the American people and the integrity of the critical lifelines provided for them by Congress, and we will continue to respond to this challenge,” said Garland.

Since Congress passed the $2 trillion CARES Act last year, the agency has investigated claims related to COVID-19-related scams, including ones that bilked the Paycheck Protection Program, the Economic Injury Disaster Loans, and unemployment insurance out of money. Then-Attorney General William Barr instructed federal prosecutors investigate and prosecute fraud claims.

“We will not allow American citizens or the critical benefits programs that have been created to assist them to be preyed upon by those seeking to take advantage of this national emergency,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division in the release. “We are proud to work with our law enforcement partners to hold wrongdoers accountable and to safeguard taxpayer funds.”

The DOJ focused on one case in Texas involving an alleged fraudster, Dinesh Sah, who applied for 15 Payment Protection Program loans using 11 different companies before receiving more than $17 million in government loans, which were used to buy property, jewelry, a Bentley convertible, and other items. Sah has since pleaded guilty.

“To anyone thinking of using the global pandemic as an opportunity to scam and steal from hardworking Americans, my advice is simple—don’t,” said acting Assistant Attorney General Nicholas McQuaid of the DOJ’s Criminal Division. “No matter where you are or who you are, we will find you and prosecute you to the fullest extent of the law.”

In another instance, eight people in California applied for 142 Payment Protection and Economic Injury Disaster Loans seeking more than $21 million using fake identities and fake companies. They then laundered the fund via web bank accounts and purchased jewelry, securities, and real estate, according to the DOJ.