The Justice Department confirmed the formation of three strike force teams last month to support ongoing initiatives to prosecute fraud connected to COVID-19 and stop it from happening again. This initiative comes after it was revealed that criminals spent COVID-19 unemployment benefits on drugs and weapons.
According to the Office of Inspector General (OIG) of the U.S. Department of Labor, crooks stole billions of dollars in unemployment benefits given out during the COVID-19 outbreak and used some of the money to buy narcotics and firearms.
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress established an unemployment assistance program for Americans who had been incapable of working as a result of lockdowns in March 2020.
The OIG has discovered, however, that certain states failed to safeguard part of the funds from erroneous transfers, including fraud, and that Pandemic Unemployment Assistance was given to people who were not actually qualified.
The OIG stated in a report (read below) published on September 30 that between all of the four states it concentrated its research on—California, Georgia, Kentucky, and Michigan—a total of $30.4 billion of the $71.7 billion in Pandemic Unemployment Assistance and Federal Pandemic Unemployment Compensation that was awarded was inadequately paid, accounting for 42.4 percent of the payouts.
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According to the report, scammers in seven states received an estimated $9.9 billion, including “criminal enterprises” who learned that unemployment insurance fraud is a “low-risk, high-reward crime.”
“They have invested fraudulent UI [Unemployment Insurance] proceeds to further other criminal activity, such as purchasing guns and drugs. Individuals who we find are central to this conduct have been indicted on charges including racketeering conspiracy,” the report states.
The report concentrated on unemployment benefits paid between March 28, 2020, and March 14, 2021.
According to the California Employment Development Department (pdf), fraudsters plundered an approximated $20 billion in unemployment funds in California alone.
‘Significant Portion Attributable to Fraud’
The OIG attributed the bogus payments on a variety of factors, including states’ failure to conduct eligibility tests, allowing claimants to self-certify their eligibility at first, and the Employment and Training Administration’s tardiness in exercising oversight over the payments.
Earlier in the year, the OIG informed Congress (pdf) that “at least $163 billion in pandemic UI benefits” may have been granted to Americans inappropriately, “with a significant portion attributable to fraud.”
Attorney General Merrick Garland formed the COVID-19 Fraud Enforcement Task Force in 2021 to assist in identifying, looking into, and prosecuting COVID-19 pandemic stimulus fraud in response to increasing complaints of fraud.
As per court submissions (pdf), officials have bought charges against a slew of criminal enterprises pertaining to unemployment insurance fraud, including the Robles Park gang in Tampa, Florida, which allegedly stole over $420,000 and used the money to buy drugs and weapons in an attempt to increase their dominance.
Eleven members of the Brooklyn-based Woo gang were also accused earlier this year in federal court in Brooklyn, New York. According to prosecutors (pdf), gang members unlawfully collected $4.3 million in unemployment benefits.
Nevertheless, thousands more additional perpetrators have yet to experience any consequences for the millions of dollars in stolen money.
The Justice Department confirmed the formation of three strike force teams last month to support ongoing initiatives to prosecute fraud connected to COVID-19 and stop it from happening again.
“These Strike Force teams will build on the Department’s historic enforcement efforts to deter, detect, and disrupt pandemic fraud wherever it occurs,” Garland said in a press release. “Since the start of this pandemic, the Justice Department has seized over $1.2 billion in relief funds that criminals were attempting to steal, and charged over 1,500 defendants with crimes in federal districts across the country, but our work is far from over.”
Read the document below: