Prime Target: Pandemic Aid and Fraud

Government aid, whether it be Medicare, Medicaid, unemployment benefits, welfare, government insurance or any of the countless grants available, has always been a target of fraud. The U.S. government's attempts to mitigate the economic effects of the COVID-19 pandemic became a prime target.The ProgramsOn March 27, 2020, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, a $2.2 trillion economic stimulus bill passed by the 116th U.S. Congress in response to the economic fallout of the COVID-19 pandemic in the United States.ARPA followed in 2021. The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, is a U.S. $1.9 trillion economic stimulus bill passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021. It was intended to speed up the country's recovery from the economic and health effects of pandemic and the ongoing recession.In May of this year, the World Health Organization announced that COVID-19 no longer qualifies as a global emergency. However, the disease is still around, as are the various schemes to try and bilk money from the aid programs.COVID-19 Fraud in NebraskaJust one recent example are the three Nebraskans recently sentenced after an investigation by the Federal Bureau of Investigations (FBI),Jazmyne L. McMiller, age 36, of Omaha, was sentenced on July 6, 2023, to 12 months and one day of imprisonment for Conspiracy to Commit Wire Fraud. After McMiller’s release from prison, she will begin a three-year term of supervised release. There is no parole in the federal system. McMiller was also ordered to pay restitution of $267,040.20.McMiller was the third defendant to be convicted and sentenced in connection with this case. On February 8, 2023, Sharon M. Thompson, age 62, of Oakland, was sentenced to four years of probation for Conspiracy to Commit Wire Fraud. Sharon Thompson was also ordered to pay restitution of $355,020.30.On May 31, 2023, Todd A. Thompson, age 57, of Oakland, was sentenced to 41 months’ imprisonment for the same crime. He will serve two years of supervised release and also ordered to pay $1,193,957.10 in restitution.During 2020 and 2021, all three defendants submitted applications for Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program loans. These loan programs were created or expanded by the CARES Act.The applications submitted or caused to be submitted by all three defendants misrepresented how much the applicant businesses had paid employees in past compensation and how much revenue each had received, resulting in significantly inflated loan amounts under the PPP and EIDL programs. The PPP applications were supported by false documents that Todd Thompson helped prepare, including false tax forms that each defendant signed.This is just one of many scams perpetrated by fraudsters in Nebraska and across the country. Fighting FraudOn January 4, 2021, Michael E. Horowitz, Inspector General of the Department of Justice, was announced as the Chair of the Pandemic Response Accountability Committee (PRAC). He had been serving as Acting Chair of PRAC since April 2020.PRAC was created in 2020 to oversee pandemic relief funding. Horowitz is charged with the task of overseeing not only deterrence of future fraud but the recovery of improperly paid funds.In a recent interview with Fraud Magazine, the official publication of the Association of Certified Fraud Examiners, Horowitz said, “When you combine estimates (from different agencies), you are looking far in excess of $100 billion in improper payments.”Horowitz pointed out, “Not every improper payment is a fraud, but we are seeing those numbers just continue to grow.”Because of the urgency during the height of the pandemic and the sheer volume of applications for funding, Horowitz acknowledges not enough was done on the front end to prevent those improper payments, “One of the things you don't do, which was done here at the outset, is to say, 'Hey folks, if you represent to us that you are truly entitled to the money, we will give you the money and won't check if your representation is true. We will simply accept it.' This is an open door for fraudsters to walk right in.”On May 24, 2023, Attorney Steven Russell announced that the United States Attorney’s Office for the District of Nebraska has been allocated three additional federal prosecutors and two additional support staff by the United States Department of Justice.“For decades, the United States Attorney’s Office in Nebraska has been a strong federal partner in promoting public safety across the state, including the prosecution of violent crime and government fraud,” said Russell. “With this significant investment of additional resources from the Department of Justice, we will be able to continue to effectively coordinate with state, local and tribal law enforcement to ensure that Nebraska is a safe place to work and live.”A term Assistant United States Attorney (AUSA) will be charged with prosecuting COVID fraud, false statements, and money laundering related to the CARES Act. This includes fraud involving the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and unemployment insurance (UI) programs committed during the pandemic.The United States Attorney’s Office for the District of Nebraska currently has 30 AUSAs working in its Criminal and Civil Divisions out of Omaha and Lincoln and is currently in the process of on-boarding two criminal AUSAs to fill existing vacancies. When the additional prosecutors are in place, a process expected to take several months, the office will have a total of 34 AUSAs representing the United States serving the citizens of Nebraska.What to Do If You Suspect FraudAnyone with information about allegations of attempted fraud involving COVID-19 can contact local law enforcement or report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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