US charges 57 with stealing $175m from pandemic aid programme

Federal agents say they are also eyeing hundreds more suspected cases of fraud related to the pandemic package.

Officials said they have identified 500 individuals who may have defrauded the $660bn Paycheck Protection Program (PPP) and that, in many cases, criminal rings had worked together to steal funds from the programme [File: Shannon Stapleton/Reuters]
Officials said they have identified 500 individuals who may have defrauded the $660bn Paycheck Protection Program (PPP) and that, in many cases, criminal rings had worked together to steal funds from the programme [File: Shannon Stapleton/Reuters]

Federal law enforcement authorities have charged 57 people with stealing $175m from an aid programme meant to help small businesses weather pandemic lockdowns, officials said on Thursday, adding that they are eyeing hundreds more suspected cases of fraud.

Officials said they have identified 500 individuals who may have defrauded the $660bn Paycheck Protection Program (PPP) and that, in many cases, criminal rings had worked together to steal funds from the programme. The Justice Department along with other agencies would focus more closely on this organised criminal activity, officials said.

“The involvement of these rings isn’t surprising, but it is particularly troubling to us here at the department, we will be focusing on these types of cases, going forward,” acting Assistant Attorney General Brian Rabbitt said during a news conference.

Officials said they believed fraud in the programme was “significant” but declined to estimate what proportion of the funds, which were passed by Congress as part of a $3 trillion pandemic rescue package, had been stolen.

A congressional panel last week said it had identified tens of thousands of the programme’s 5.2 million loans that may have been defrauded or misused, amounting to potentially billions of taxpayer funds.

This week, JPMorgan Chase & Co, which dished out nearly $30bn PPP loans, said it was working with law enforcement after identifying cases of customers “misusing” the funds.

Senator Marco Rubio, chair of the Senate’s small business committee, on Thursday wrote to JPMorgan CEO Jamie Dimon asking for more details on the potential fraud and what the bank was doing to mitigate it.

Law enforcement officials have been working with lenders to identify problematic loans and on Thursday said they were using cutting edge data analytics technology which they had honed on corporate and healthcare fraud probes to quickly identify red flags.

“You cannot hide from these digital and paper trails,” Internal Revenue Service criminal investigations chief James Lee warned fraudsters at the briefing.

Source : Reuters

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