The Department of Justice (DOJ) released a new report by the Covid-19 Fraud Task Force (which investigates pandemic-era scams) which exposes new fraud schemes (for more than 9 million dollars) exposing new fraud schemes (in excess of $9 million) that were carried out using financial assistance from the Paycheck Protection Program (PPP).
Attorney General Merrick Garland stated that since establishing “the COVID-19 Fraud Control Task Force three years ago, more than 3,500 people have been charged, more than $1.4 billion in stolen COVID-19 relief funds have been seized or confiscated, and more of 400 civil lawsuits have been filed resulting in court judgments and settlements." He further asserted:
Our work is not finished. We will continue our efforts to investigate and prosecute pandemic relief fraud and recover assets that have been stolen from American taxpayers.
More than $9 million in scams
The 2024 study revealed that a Florida resident, named Don V. Cisternino, obtained $7.2 million in emergency funds. The man applied for money from the program by lying about his company information (he claimed he had more than 400 employees and his payroll was more than $2.8 million). However, the businessman was the only employee hired at his company.
With the money, Cisternino bought a property in central Florida and two high-end cars (Mercedes Benz and Maserati). The man fled the country and was arrested in southern Europe with the help of Interpol. He was found guilty and sentenced to more than eight years in prison.
Another case exposed in the report is that of Heather Huffman - a nurse from Virginia - who was employed at the Veterans Affairs Administration. The woman recruited family and friends to ask for $3.5 million in aid and unemployment insurance benefits: "They submitted more than 220 applications on behalf of more than 120 people to at least five different states and obtained more than 2 million Dollars."
Huffman used a false identity to flee the law. However, authorities found her under her new name in Kansas. She is accused of "defrauding at least five state workforce agencies." She was arrested and sentenced to 18 years in prison for her role in the scheme. Three of his accomplices were also sentenced to between three and five years in prison for their participation.
Anti-fraud program
Along with the DOJ report, the Biden Administration announced new legislation to "crack down" on "systemic pandemic fraud across all government programs":
Today, Senate Homeland Security and Governmental Affairs Committee Chairman Gary Peters, Senate Judiciary Committee Chairman Dick Durbin, and Senate Finance Committee Chairman Ron Wyden present an important new legislation, the Fraud Prevention and Recovery Act, inspired by President Biden's sweeping pandemic fraud proposal highlighted in the fiscal year 2025 budget, to end systemic pandemic fraud across all government programs and help victims of identity theft to recover.
President Joe Biden indicated that this "legislation is the latest in a series of bills - including several bipartisan ones - that would enact the President's comprehensive proposal against pandemic fraud." Among them:
- Provide hundreds of millions of dollars for the investigation and prosecution of those involved in significant pandemic fraud.
- Invest in fraud prevention to help prevent identity theft and major fraud related to public benefit programs.
- Help victims of identity theft who are facing hardship, credit score deterioration, tax liability, and extreme stress and helplessness through no fault of their own.
