In January 2021, Chilivis Grubman attorneys discussed government enforcement actions related to COVID-19 relief funds and particularly, a guilty plea by Austin Hsu in a large scheme to defraud several COVID-19 relief fund programs.
As discussed in January, Mr. Hsu admitted to fraudulently obtaining COVID-19 relief funds by submitting applications for PPP loans with false information. He also admitted to submitting false federal tax records supporting his false PPP applications. Mr. Hsu’s scheme involved the creation of a new company, Blueline Capital, which he used to apply for an Economic Injury Disaster Loan (“EIDL”) despite Blueline Capital having no operations or business. As part of the scheme, Mr. Hsu submitted nine fraudulent disaster loan applications seeking over $1 million. Only six of the fraudulent applications were approved but he received more than $700,000 in relief funds. Mr. Hsu was sentenced to two years in prison for perpetrating the scheme to fraudulently obtain COVID-19 relief funds. He was also ordered to pay a $25,000 fine and $709,104.97 in restitution.
Since the COVID-19 pandemic, CG attorneys have discussed government enforcement efforts related to COVID-19 relief programs. There have been several indictments connected to fraud on COVID-19 relief programs and reports of sentencings are becoming more frequent. The government has created several task forces to combat fraud. In May 2021, U.S. Attorney General Merrick Garland announced the establishment of a COVID-19 Fraud Enforcement Task Force, which will coordinate the resources of the DOJ to combat and prevent fraud on COVID-19 related relief programs. The COVID-19 Task Force will also join the Pandemic Response Accountability Committee (“PRAC”) in performing oversight functions related to COVID-19 relief funds. Recipients of COVID-19 relief funds should ensure continued compliance. According to Attorney General Garland, “[t]he Department of Justice will use every available federal tool – including criminal, civil, and administrative actions – to combat and prevent COVID-19 related fraud.”
The attorneys at Chilivis Grubman – which include a former federal prosecutor – represent businesses and individuals in connection with government investigations and audits, including those conducted by HHS-OIG and the DOJ. If you need assistance with such matters, please contact us today.