How the FBI is Combating COVID-19 Related Fraud
The Following Op-Ed by FBI Springfield Special Agent in Charge David Nanz Was Published in the State Journal Register
To address economic hardship caused by the COVID-19 pandemic, the U.S. Government authorized approximately $5 trillion in relief programs. These programs included the Paycheck Protection Program (PPP), which allowed businesses to apply for forgivable loans to pay for payroll and other expenses; the Economic Injury Disaster Loan Program (EIDL), which permitted businesses to apply for low interest loans to be used for working capital and other normal expenses; and Federal Pandemic Unemployment Compensation (FPUC), which was intended for employees who lost their jobs due to the pandemic.
Unfortunately, many thousands of people chose to steal from these programs by submitting fraudulent applications. The theft was massive in scale. The U.S. Small Business Administration inspector general estimates $136 billion in fraud from the EIDL and $64 billion in fraud from the PPP. For FPUC, the U.S. Government Accountability Office estimates more than $100 billion in fraud. Combined, these losses make the fraud the largest in history. Ultimately, these losses will be paid by American taxpayers, and worse, because most of the money was borrowed by the U.S. Government, our children and even grandchildren will be on the hook.
How did some fraudsters spend their stolen money? Some bought real estate, luxury vehicles like Lamborghini and Ferraris, luxury goods like Rolex watches and jewelry, gold coins, and diamonds. While others used the money in strip clubs, gambling trips to Las Vegas, private jet charters, and bucket-list vacations.
The FBI has been working diligently to hold these thieves accountable. By collaborating with our partners and utilizing intelligence-driven strategies, we have opened thousands of investigations across the country targeting COVID-19 related fraud. Just in the FBI’s Springfield Field Office, which covers central and southern Illinois, our team of dedicated special agents, intelligence analysts, and forensic accountants are working investigations which have led to the charging of dozens of subjects. Recently, one of our investigations led to 19 U.S. Postal Service employees and former employees in central Illinois being charged with defrauding the PPP by claiming bogus expenses in fictitious businesses. In another FBI Springfield investigation, three Peoria men were convicted of defrauding the PPP by claiming to operate barber shops. However, none of them had a registered barber shop, employees, payroll, or business-related expenses, and none were licensed barbers.
Besides the obvious importance of holding criminals accountable, the FBI’s investigative efforts targeting COVID-19 related fraud also sends a vital message: people cannot steal money from American taxpayers with impunity. We still have a long way to go to hold more perpetrators accountable, and given the size and scope of the fraud, the FBI and our law enforcement partners cannot do it alone. So, we ask if you have information on those who defrauded these pandemic relief programs, contact the FBI. To report fraud, go to www.ic3.gov or contact FBI Springfield at 217-522-9675.
FBI Springfield Field Office Special Agent in Charge – David Nanz