No more fraud in COVID Relief Cash Giveaway; IRS workers steal $1 million to buy cars and jewelry

Amid rampant fraud and corruption amid the government’s mass distribution of COVID-19 relief money, Internal Revenue Service (IRS) employees have been accused of stealing more than a million dollars to pandemic relief programs to buy luxury goods, luxury cars and travel. Five current or former employees of the dreaded tax agency easily withdrew the money by filing multiple bogus loan applications with two of the federal stimulus programs – Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) – launched in part of the monstrous Coronavirus Aid, the CARES Act (Relief, and Economic Security Act), passed by Congress to provide more than $2 trillion in “prompt and direct economic relief” to Americans adversely affected by the pandemic.

Unsurprisingly, CARES is plagued by fraud and corruption and the IRS employee scandal is just the latest of countless examples. How serious is the problem? Last year, the Department of Justice (DOJ) established a COVID-19 Fraud Enforcement Task Force to “enhance efforts to combat and prevent pandemic-related fraud.” The special unit has been very busy prosecuting scams, misrepresentations 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. Among these cases, the task force has prosecuted over 150 offenders and seized over $75 million in 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 allegedly trusted employees who work for US taxpayers commit the fraud, as is the case with the IRS defendants. The scheme involves five current and former employees of the Tennessee and Mississippi tax agency. Federal authorities say they used illegally obtained pandemic relief funds to buy expensive designer clothes (Gucci), a luxury imported car (Mercedes-Benz), jewelry, trips to Las Vegas, manicures and massage. The remaining money was deposited in personal investment accounts. Each of the defendants submitted multiple fraudulent claims to obtain at least tens of thousands of dollars in relief funds. An IRS program and risk assessment analyst submitted four fraudulent claims for more than half a million dollars. Another, who worked as a program assistant in the agency’s information technology department, also submitted multiple claims asking for $338,900 on behalf of a fake fashion company. “These individuals — acting out of sheer greed — abused their positions by taking public funds intended for citizens and businesses in desperate need,” said U.S. Attorney Kevin G. Ritz for the Western District of Tennessee.

This case is just one snippet of the widespread problem with the government’s incredible distribution of pandemic money. Just days ago, a federal audit found that billions of dollars in expanded COVID-19 unemployment insurance benefits funded through CARES had 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 distributed an impressive $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 approximately $45.6 billion had been paid out to unqualified applicants, a huge increase from the $16 billion in fraudulent payments last year. The criminals used the deceased’s Social Security numbers or other illegal schemes to obtain the money, according to the audit which focused on four states. One of the states investigated by investigators improperly paid out $30.4 billion of its $71.7 billion total in unemployment benefits. “We estimated that $9.9 billion of this sum was paid to probable fraudsters (13.8%),” the report said, adding that in the four states analyzed, one in five dollars initially paid in PUA benefits probably went to scammers. Yet the money continues to flow.

Post expires at 7:24pm on Saturday October 15th, 2022