Billions in pandemic fraud: DOJ looking to recover every penny of COVID relief fraud

DENVER ( KDVR ) — If you took money from struggling businesses to survive the pandemic, there’s a warning from the Department of Justice: A “COVID-19 Strike Force” team is coming for you.

Congress expanded the statute of limitations to ten years to prosecute Payment Protection Program fraud cases, and law enforcement is warning that if you cheated the system, you’re not in the clear. FOX31 learned billions of dollars ended up in the wrong hands and the government wants every penny back.

“The funds were meant for a good reason, and it was super important to keep our economy running at that time,” said Jonathan Towle, acting special agent in charge for the IRS Criminal Investigation Denver Field Office.

Trillions were allocated for those in need as businesses struggled to stay afloat for the first two years of the pandemic. The PPP offered forgivable loans to businesses that kept employees on the payroll.

Former Acting U.S. Attorney for the District of Colorado Matt Kirsch said not all that money ended up in the right hands.

“It’s one of our top priorities in the economic crime section right now,” said Kirsch. “We’re one of five districts nationwide that have a COVID fraud strike force. We have 4 prosecutors who are working on that strike force, and we have other prosecutors who have cases who are dealing with that topic as well.”

The task force was created about a year ago with members of his officer and several other agencies to find and recoup PPP money.

“We’ve charged 30 defendants so far; 12 of those people have been sentenced already and those 12 people attempted to steal about $29 million,” said Kirsch. “The SBA’s office of inspector general have done an analysis of the Paycheck Protection Program and the Economic Injury Disaster Loan program. Those two programs together gave out more than a trillion dollars, and they estimate about $200 billion of that money may have been connected to fraud.”

There are also 53 active cases in the works. However, Kirsch can’t talk about those cases yet.

“We can talk about information that’s public,” Kirsch said.

Colorado boutique owner stole $500K in relief funds

He did speak about one case the Problem Solvers have been looking into. Online boutique owner Shambrica Washington was convicted of misusing nearly $500,000 in relief funds. She was found guilty on 31 counts of wire fraud, bank fraud, money laundering and making false claims.

Court records show she used the money to buy homes, vehicles and an elective surgery.

“What a waste and misuse of taxpayer money that is, and seeing that kind of spending of these sorts of funds makes everybody working on the task force motivated to prosecute these cases,” said Kirsch.

“Ultimately, she attempted what would have accumulated to $16 million of payroll protection fraud but she was able to walk away with $485,000,” Towle said. “I’m a taxpayer and I’m upset by it. It’s unfair to everybody if you’re going to take the money and use it for personal gain.”

While COVID relief funds are in the rearview mirror, the Task Force still has a lot of work to do.

“I want people to know how much time and effort the DOJ is investing in trying to recoup as much of this money as we can,” said Kirsch.

“If you committed this fraud and you think you got away with it you probably haven’t. We are diligently looking,” Towle said. “The statute of limitations is 10 years which is a long time, and were going to keep looking from one loan to the next to see if anybody used the money inappropriately.”

Towle said nationally, they have investigated more than 3,500 fraud cases in this particular program.

“At this point in time the IRS Criminal Investigation (IRSCI) have investigated $8.9 billion worth of this fraud nationally,” he said.

If you committed fraud and want to end the suspense on whether the Task Force is going to find you, you can report yourself and work with agents to get a more lenient sentence.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form here .

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