The U.S. Department of Justice, the country's chief enforcer of federal laws, is girding for two new types of pandemic-related crimes expected to spell trouble, a top official says.
Federal authorities are on the lookout for criminals who try to siphon off some of the business-sector stimulus dollars including the $659 billion in Small Business Administration loans intended to help employers keep paying their personnel, Assistant Attorney General Brian Benczkowski says. He suspects phony entities will go after some of the relief money and actual businesses may falsify payroll records to inflate their employee count and employees’ salaries.
One particular concern, he says, is foreign fraudsters grabbing some of the stimulus cash and stashing it in bank accounts overseas, where it's difficult to recover.
Authorities also are keeping an eye on fraudulent overbillings, for tests for COVID-19 and other illnesses, that are submitted to Medicare and Medicaid, he says. Corrupt doctors and complicit testing labs tend to be coconspirators in such crimes.
The bottom line: Unnecessary tests could be tacked onto a $30 test for COVID-19, and the government get a claim for $1,530.
Going after bad actors
Benczkowski, 50, has been chief of the Criminal Division since July 2018. The division's more than 600 attorneys prosecute an array of violations: fraud, organized crime, drug trafficking and transnational computer crimes, among many others.
Illegal schemes tied to COVID-19 already have emerged and triggered arrests and federal charges from New York to California.
The first criminal charge was filed March 25 against a Los Angeles actor from the Iron Man movies who hawked a fake cure for COVID-19 and promised astronomical returns to prospective financial backers. (To date, there is no approved cure for the acute respiratory illness.)
In an unrelated case, two men were criminally charged for lying to potential investors by claiming to have 40 million N95 face masks that “could be sold for double or triple” the purchase price. But the touted masks didn't exist.
Says Benczkowski: “There's almost no limit on the creativity of fraudsters and others to use COVID as a basis to commit new types of fraud, but also to put new twists on the same old scams."