DOJ fights COVID-19 fraud at “unprecedented pace and tempo”

In one Press release published on March 26, 2021 (“Press Release”), the Department of Justice (“DOJ”) announced that immediately after the adoption by Congress of the Aid, Relief and Security Act (“CARES”) against the coronavirus, the DOJ has created an elaborate network to protect the integrity of the $ 2.2 billion economic relief program. Working with a myriad of law enforcement partners, the DOJ has so far charged nearly 500 people with crimes related to fraud schemes targeting the Paycheck Protection Program (“PPP”) , the Economic Injury Disaster Loan Program (“EIDL”) and Unemployment Insurance (“UI”) programs, as well as various acts of consumer fraud that have exploited the fear and desperation of consumers. private citizens during the global pandemic. Efforts to uncover healthcare fraud are also well advanced, led by HHS.

According to the press release, an increase in whistleblower complaints has been “a critical source of new leads,” fueling the DOJ’s swift and effective response nationwide.

So far, the DOJ has uncovered PPP frauds perpetrated by more than 120 defendants, including doctors, whose plans were to inflate payroll costs to get larger loans and to seek loans from non-existent, defunct, or fictitious companies falsely claiming large payroll obligations. In most cases, the fraudulently obtained financing has been used to purchase real estate, vehicles, jewelry and other luxury consumer items. The press release further confirms that DOJ used the Federal False Claims Act as its “primary civil tool” to facilitate these recoveries.

The press release says that to date, the DOJ has already seized $ 580 million in funds that have been diverted from the EIDL program to fraudsters “requesting EIDL advances and loans on behalf of newly established non-qualifying businesses. , typos or none ”and use the funds for illegal purposes. More than 140 defendants have also been charged with federal offenses related to unemployment insurance fraud, ranging from ineligible individuals such as detainees to members of international organized crime groups who have used stolen identities to claim benefits. unemployment insurance. To help fight unemployment insurance fraud, the DOJ is hiring U.S. assistant lawyers in several offices across the country to prosecute perpetrators of the fraud.

According to the press release, the DOJ’s international hacking and intellectual property program led an international effort to combat online fraud and intellectual property, resulting in significant seizures of drugs, medical supplies and other property. illicit ill-labeled and counterfeit. The DOJ has also put an end to online scams selling fake and illegal COVID-19 treatments and cures, “including industrial bleach, ozone gas, vitamin supplements and silver ointments. colloidal ‘, as well as pesticides. Some of these crooks have been health care providers and others masquerading as health care providers. The DOJ has partnered with HHS to distribute confiscated medical supplies to price gougers, and is currently working to prevent and deter vaccine fraud.

The DOJ attributes “the unprecedented pace and pace of these efforts” to a wide range of law enforcement partners, including HHS, whose Office of the Inspector General (“OIG”) has prioritized investigation into COVID-19 scams billed to federal health programs. Since the pandemic took root in early last spring, the OIG has added a number of audits to its work plan, for example by targeting home health services provided in the form of telehealth, contracts awarded for COVID-19 testing, Medicare Part B laboratory services and telehealth services, hospital discharges with COVID-19 diagnoses, COVID-19 Complementary Laboratory Tests, general and targeted distributions of Provider Relief Funds and compliance with the reporting requirements of the Provider Relief Fund, among others. The DOJ Note At the end of last year, he expects “the inevitable fraud schemes” to include false claims regarding eligibility, misuse of program funds, and false certifications of compliance with program requirements. . The results of the OIG audit are expected to start releasing shortly, and any related fraud prosecutions by the DOJ will likely follow.

Convenient take-out

The DOJ has clearly embarked on an aggressive crackdown on individuals and entities who have attempted to take advantage of the current pandemic. While many of the examples mentioned above can be considered blatant fraud, it may only be a matter of time before law enforcement agencies enter more “gray areas.” ”Regarding the disbursement of grants from the CARES Act. Once that happens, the DOJ could again look to the FCA for help in these efforts. Recipients of CARES Act grants in the area of ​​health care should therefore be prepared for further government scrutiny in the near future regarding entitlement to these funds. To this end, recipients of CARES Act grants should consider their ongoing compliance obligations associated with these funds and implement timely and appropriate audits and controls to ensure compliance with the receipt and use of these grants.


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Keith Johnson

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