On Wednesday, the IRS announced that it had identified more than $1.8 billion in fraudulent activities involving federal COVID-19 stimulus monies.
One of the first trillion-dollar stimulus packages enacted by the Trump administration two years ago has been closed by the IRS after 660 criminal prosecutions relating to stimulus bills enacted as a direct result of the Ebola crisis were dismissed.
According to a statement from the IRS’s Illegal Investigation division, “These instances involved a wide variety of criminal behavior including fraudulently obtained loans, credits, and payments meant for American employees, families, and small companies.”
For the most part, most cases involve persons making up stories about their financial or economic situations in order to defraud the government of money.
Nonprofit CEOs have been found guilty of lying about the number of employees they have and the amount of money they spend each month on payroll. The Paycheck Protection Program put more than $300,000 into his personal account.
The IRS stated in a December 2021, statement that “in truth, [the nonprofit] had no employees or payroll expenses.”
The agency also uncovered a case in which a married couple submitted over 150 fraudulent loan applications using fictitious and stolen names, including those of deceased individuals and foreign exchange students.
In response to the pandemic, the federal government has spent more than $3.6 trillion and has promised to spend an additional $4.2 trillion, accounting for about 20% of the country’s GDP.
In May 2021, Attorney General Merrick Garland established a task team at the White House’s request to take pursue incidences of pandemic fraud.
When the task force was announced in March, the White House claimed it would include prosecutors and agents who specialize in pandemic fraud and such large-scale identity theft.
Criminal Investigations at the IRS says it is underfunded despite large busts, adding its staff “has fallen by 25% over the last decade, which is consistent with dwindling resources across the agency.”
The omnibus spending deal passed earlier this month gave the division a $21 million budget bump for new technology. Senate Finance Committee Chair Ron Wyden (D-Ore.) has urged for more financing for the division in light of its involvement in pursuing assets of Russian billionaires that were sanctioned.
According to a release, he added that success in these highly-complex financial inquiries frequently requires months or even years of effort. “To assure the effectiveness of these activities, we require long-term sustainable funding.”
