As part of the U.S. Department of Justice (DOJ) crackdown on white-collar crime, it has announced the creation of “strike force teams” focused on pandemic fraud – a type of crime that usually involves unlawfully participating in the Paycheck Protection Program (PPP), Economic Injury Disaster Loan program, unemployment insurance programs or COVID-19 health care. These teams will be made up of federal prosecutors and law enforcement agents from the FBI, Secret Service, IRS and more than a half-dozen other executive agencies. According to Attorney General Merrick B. Garland, the teams will “build on the Department’s historic enforcement efforts to deter, detect and disrupt pandemic fraud wherever it occurs,” and will add to the DOJ’s already considerable pandemic fraud prosecution efforts. Since the start of the COVID-19 pandemic, the DOJ has charged over 1,500 defendants with crimes in federal districts across the country and seized over $1.2 billion in misappropriated relief funds.
The creation of strike force teams demonstrates that federal law enforcement will continue to scrutinize individuals and companies that participated in COVID relief programs. If law enforcement concludes that its targets acted improperly, formal investigations and prosecutions may follow.
Because of the DOJ’s new surge of resources to its pandemic fraud investigations, companies that participated in COVID relief programs should consider what steps they can take to mitigate potential criminal consequences. For example, the DOJ has recently announced new policies related to a corporation’s disclosure of criminal acts. If a company or its employees has committed pandemic fraud, self-disclosure can lead to a more favorable corporate outcome.
Varnum has significant experience counseling and representing companies and individuals during government investigations, proffers and prosecutions related to the PPP and other forms of pandemic fraud. For more information, contact a member of Varnum’s White Collar Defense and Government Investigations team.