In his State of the Union address on Tuesday, President Joe Biden announced he will appoint a special prosecutor as part of a series of measures to fight fraud and identity theft in pandemic relief programs.
Special Prosecutor for PPP Fraud
The COVID pandemic relief programs have paid out more than $800 billion by the government in two years to help small businesses survive. The loans require small businesses to spend the money on payroll and other eligible expenses within a specified time frame.
READ MORE: $341 Million in PPP Fraud So Far, And That’s Counting
The move comes as the United States Department of Justice (DOJ) is chasing individuals and companies across the country who have falsified paperwork to obtain forgivable loans designed to give small businesses an edge. As such, the Department of Justice’s (DOJ) COVID-19 Fraud Enforcement Task Force will expand its efforts by appointing a Chief Prosecutor. The prosecutor will lead teams of specialist prosecutors and agents to fight pandemic fraud, such as those who commit large-scale identity theft, including actors based abroad.
What is included in the measures?
The new measures will indict more individuals and companies in the more than 1,000 criminal cases and more than 200 civil investigations of 1,800 individuals and entities involving billions of dollars in suspected fraud since May 2021.
The president will call on Congress to provide the resources needed for the DOJ task force to expand the prosecution of blatant pandemic fraud, including in support of the strike teams.
In addition, the president will issue an executive order with broad government-wide guidelines to prevent and detect identity theft with public benefits, while protecting privacy and civil liberties and preventing bias that leads to disparate outcomes. The implementing decree will also lead to new actions to support victims of identity fraud.
The amount of fraud from COVID aid to date
In addition to errors in filling out PPP forgiveness requests, rampant fraud has been observed with COVID-related assistance for businesses. Last December, Secret Service investigations into unemployment insurance and Paycheck Protection Program (PPP) fraud led to the seizure of more than $1.2 billion, the return of more than $2.3 billion to fraudulent obtained funds and the unemployment insurance program.
The crackdown comes on the heels of President Biden’s implementation of new rules for the PPP loan program to ease access to COVID loans for small businesses last month. In late February, the president announced that a 14-day window has been set for applying for PPP loans, exclusively for businesses and nonprofits with fewer than 20 employees.
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