On March 10, the Department of Justice announced the appointment of a chief prosecutor to oversee enforcement efforts stemming from fraud against COVID-19 pandemic relief funds. Associate Deputy Attorney General Kevin Chambers has been named the Director for COVID-19 Fraud Enforcement. President Joe Biden announced the creation of the position on March 1, stating that criminals had defrauded the American people out of billions of dollars in relief that was meant for small businesses and their workers. Mr. Chambers is set to “focus on the most egregious forms of pandemic fraud,” including identity theft by foreign-based actors. DOJ will utilize advanced analytics to identify especially sophisticated fraud schemes against the programs.
COVID relief fund fraud has been a focus of the Department of Justice since the various programs’ inceptions. In May of 2021, the Department established the COVID-19 Fraud Enforcement Task Force to investigate claims of fraud against these programs. Along with announcing the chief prosecutor, President Biden has called for additional resources for the task force to combat the rampant fraud against the programs. However, the President cannot allocate the funds unilaterally, and Congress would need to act to provide those additional resources.
Individuals and entities found to have defrauded COVID-19 relief funds face charges for mail and wire fraud, which may result in significant prison terms and criminal monetary penalties. The President has called on Congress once again to enact heightened penalties for individuals who are found to have committed fraud against the relief funds; however, it remains to be seen whether Congress would find additional penalties necessary given the potential lack of deterrent effect. Along with criminal fraud charges, individuals and entities who have engaged in fraudulent activity in connection with COVID relief funds face potential liability under the False Claims Act. If found liable under the False Claims Act, defendants potentially face damages triple the amount that they actually received from the COVID relief programs.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations, False Claims Act investigations, and related commercial litigation. If you need assistance with such a matter, please contact us today.