More Fraud in COVID Relief Cash Giveaway; IRS Workers Steal $1 Mil to Buy Cars, Jewelry
Amid the rampant fraud and corruption in the government’s massive COVID-19 relief cash giveaway, Internal Revenue Service (IRS) employees have been charged with stealing over a million dollars from pandemic relief programs to buy luxury goods, fancy cars, and travel. Five current or former employees from the feared tax agency easily withdrew the money by filing several false loan applications with two of the federal stimulus programs— Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL)—launched under the monstrous Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress to provide over $2 trillion in “fast and direct economic aid” to Americans negatively impacted by the pandemic.
Not surprisingly, CARES is rife with fraud and corruption and the IRS employee scandal is simply the latest of countless examples. How bad is the problem? Last year the Department of Justice (DOJ) created a COVID-19 Fraud Enforcement Task Force to “enhance efforts to combat and prevent pandemic-related fraud.” The special unit has been quite busy prosecuting scams, false statements, and money laundering related to the multi trillion-dollar CARES Act. So far, criminal charges have been filed against more than 1,000 defendants and the loss of public funds exceeds $1.1 billion, according to the DOJ. Of those cases, the task force has prosecuted more than 150 offenders and seized over $75 million derived from fraudulently obtained PPP funds as well as numerous real estate properties and luxury items purchased with the illegally obtained money.
The sting is even greater when presumably trusted employees who work for American taxpayers commit the fraud as is the case with the IRS defendants. The scheme involves five current and former employees of the tax agency in Tennessee and Mississippi. Federal authorities say they used the illegally obtained pandemic relief funds to buy expensive designer clothes (Gucci), a fancy imported car (Mercedes-Benz), jewelry, trips to Las Vegas, manicures, and massages. The leftover cash was deposited into personal investment accounts. Each of the defendants submitted multiple fraudulent applications seeking at least tens of thousands of dollars in relief funds. An IRS Program Evaluation and Risk analyst submitted four fraudulent applications seeking more than half a million dollars. Another who worked as a program assistant in the agency’s information technology department, also submitted multiple applications seeking $338,900 on behalf of a fake fashion business. “These individuals – acting out of pure greed – abused their positions by taking government funds meant for citizens and businesses who desperately needed it,” said U.S. Attorney Kevin G. Ritz for the Western District of Tennessee.
This case is only a snippet of the widespread problem with the government’s insane pandemic cash handout. Just a few days ago, a federal audit revealed that billions of dollars in expanded COVID-19 unemployment insurance benefits funded under CARES have been stolen by fraudsters. The programs are known as Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), and Federal Pandemic Unemployment Compensation (FPUC) and they have doled out an eye popping $663.8 billion in pandemic-related unemployment benefits as of April 23, 2022. An investigation by the Department of Labor (DOL) Inspector General found that around $45.6 billion was paid to applicants who did not qualify, a huge increase over last year’s $16 billion in fraudulent payments. Criminals used the Social Security numbers of the deceased or other illegal ploys to obtain the money, according to the audit which focused on four states. One of the states scrutinized by investigators improperly paid out $30.4 billion of its total $71.7 billion in unemployment benefits. “We estimated $9.9 billion of that was paid to likely fraudsters (13.8 percent),” the report states, adding that in the four states analyzed, one in five dollars initially paid in PUA benefits likely went to fraudsters. Yet the cash keeps flowing.