IRS Probe Finds Nearly $2 Billion in COVID-Related Stimulus Fraud
IRS investigators have uncovered more than $1.8 billion in fraudulent activity related to federal COVID-19 stimulus funds.
Two years after Washington passed the first trillion-dollar stimulus package, which provided $1,200 checks to individuals and forgivable loans to small businesses as the US economy shut down, the IRS said it has closed 660 criminal cases related to various stimulus bills prompted by the pandemic.
“These cases included a broad range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families, and small businesses,” the IRS Criminal Investigation division said in a statement. Many of these are wire fraud cases in which people made false claims about their business or financial situation in order to obtain money from the government.
One such case involved the CEO of a nonfunctioning nonprofit organization who pleaded guilty to lying about having 25 employees and an average monthly payroll cost of more than $120,000. He received more than $300,000 from the Paycheck Protection Program, which was deposited into his personal account.
In reality, the nonprofit had no employees or payroll expenses.
Another case highlighted by the agency involved a married couple who used made-up and stolen identities, including some belonging to deceased people and foreign exchange students, to submit more than 150 fraudulent loan applications.
The federal government has paid out more than $3.6 trillion dollars and is committed to pay $4.2 trillion in response to the pandemic, totaling almost 20 percent of U.S. gross domestic product.
In March, the White House said a task force with specialized prosecutors and agents would focus on major targets of pandemic fraud, such as those committing large-scale identity theft.