'You cannot hide': Biden administration to go after scammers who stole billions in COVID relief

WASHINGTON – The Biden administration announced a series of measures Thursday to track down and punish fraudsters who scammed billions of taxpayer dollars that were supposed to provide relief to Americans during the COVID-19 pandemic.

President Joe Biden is pledging $1.6 billion to bolster law enforcement manpower and new programs that will be used to prosecute scammers, prevent fraud, and provide assistance to victims of identity theft.

“We want to not only capture them and get their funds, we want to send a signal to them that you can run, but you cannot hide,” said Gene Sperling, a Biden senior adviser who is overseeing the implementation of the COVID-relief plan.

President Joe Biden's administration is planning to a $1.6 billion package to crack down on fraud in COVID relief funds.
President Joe Biden's administration is planning to a $1.6 billion package to crack down on fraud in COVID relief funds.

The latest

  • The administration’s plans call for creating 10 Department of Justice “strike forces” that will include U.S. attorneys and other law enforcement officials to investigate COVID-relief fraud and help recover stolen tax dollars. The teams will target criminal syndicates and other major fraudsters. Three strike forces already are in place and have recovered millions of dollars in stolen relief funds, officials said.

  • The administration also will propose increasing the statute of limitations to 10 years for fraud involving the pandemic Unemployment Insurance program, which has been hit especially hard by scammers.

  • Some $300 million will be distributed to inspectors general at the Small Business Administration, the Department of Labor and the staff of the Pandemic Response Accountability Committee, a government watchdog over pandemic spending. The money would be used to hire investigators and make sure they have the resources needed to pursue specialized cases of pandemic fraud.

  • In his proposed budget to be released next week, Biden will offer a package of legislative reforms to prevent, detect and recover payments made improperly through the Unemployment Insurance program.

  • Federal grants would be made to states to help modernize their information technology systems to enable them to respond more quickly to fraud, decrease erroneous payments and provide more efficient claims processing.

  • New initiatives also would be put in place to identify victims of identity theft, including an early warning system to stop potentially fraudulent transactions before they occur and a one-stop shop to report identity crimes.

Why it matters

The federal government distributed more than $5 trillion in pandemic relief under programs approved by Biden and former President Donald Trump. The money was distributed quickly, leading to an increase in fraud and other improper payments, such as those that shouldn’t have been made or were made in the wrong amount.

The Government Accountability Office reported last month that the extent of fraud in COVID-relief programs is not yet known but that the Unemployment Insurance program alone was believed to have made more than $60 billion in fraudulent payments.

From March 2020 to last January, at least 1,044 people pleaded guilty or were convicted of defrauding COVID relief programs, the GAO report said. Federal charges were pending against another 609 individuals or entities for attempting to defraud COVID-relief programs.

Also, the federal government gave $5.4 billion in COVID aid to small businesses with “questionable” Social Security numbers, the Pandemic Response Accountability Committee reported in January. The watchdog identified nearly 70,000 questionable Social Security numbers used to obtain pandemic aid from two programs run by the Small Business Administration.

What's next?

The Republican-led House Committee on Oversight and Accountability Committee has opened an investigation into fraud in COVID-relief programs. The committee held its first hearing on the subject last month.

Sperling, however, said the administration’s anti-fraud package isn’t a direct response to the GOP investigations. Most of the proposals were being prepared before last November’s election, he said.

Go deeper

COVID relief: About 18 million college students got a financial boost from Biden's COVID-19 rescue law

Winding down: Biden will end COVID-19 emergency declarations on May 11 after more than 3 years

Student debt: Could Biden's student loan debt forgiveness plan be affected by the end of the COVID emergency?

Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.

This article originally appeared on USA TODAY: COVID-19: Biden to take aim at pandemic-relief fraudsters