Nearly 60 people face pandemic fraud fees – federal government warns others you can’t hide

FILE PHOTO: The US Department of Justice building is bathed in morning light as sunrise in Washington, U.S. February 14, 2020. REUTERS / Mary F. Calvert

By Doina Chiacu and Mark Hosenball

Federal law enforcement officials accused 57 people of stealing $ 175 million from an aid program to help small children businessLockdowns due to a weather pandemic, officials said this week.

They added that they were eyeing hundreds of other suspected cases of fraud.

Officials said they identified 500 people who may have defrauded the $ 660 billion Paycheque Protection Program (P3) and that, in many cases, criminal networks had worked together to steal funds from the program.

The Justice Department and other agencies would focus more closely on this organized criminal activity, officials said.

“The involvement of these rings is not surprising, but it is particularly troubling to us here in the department. We will focus on these types of cases in the future, ”Acting Deputy Attorney General Brian Rabbitt said at a press conference.

Officials said they thought the fraud in the program was “significant” but declined to estimate what proportion of the funds, which had been voted by Congress as part of a pandemic rescue package. $ 3 trillion, had been stolen.

A congressional panel said last week that it had identified tens of thousands of the program’s 5.2 million loans that may have been defrauded or misused, potentially representing billions of public funds.

This week, JPMorgan Chase & Co., which has distributed nearly $ 30 billion in PPP loans, said it was working with law enforcement after identifying cases of clients “abusing” funds.

Senator Marco Rubio, R-Fla., Chairman of the small business committee, wrote to JPMorgan CEO Jamie Dimon Thursday, requesting more details on the potential fraud and what the bank was doing to mitigate it.

Law enforcement officials worked with lenders to identify problematic loans and said on Thursday they were using cutting-edge data analysis technology they had perfected on corporate fraud investigations and health care to quickly identify red flags.

“You can’t hide from these digital and paper traces,” Internal Revenue Service chief of criminal investigations James Lee warned during the briefing.

– Reuters

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