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IRS still investigating COVID-19 fraud

Four years ago, the nation was rocked by fear of the COVID-19 virus. Businesses were ordered closed and tens of millions of Americans were ordered to stay at home. Realizing that most of those closed businesses would need money to stay afloat, the U.S. Congress passed the bipartisan Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide low interest loans, grants, and subsidies to a host of businesses and nonprofits. The program was rife with fraud as criminals applied for CARES Act money for businesses that did not exist. People applied for unemployment relief for jobs they did not have. In many cases, people used stolen identities to apply for funds that were due (if at all) to other people.

The IRS Criminal Investigation Atlanta Field Office recently released a statement marking the anniversary of passage of the CARES Act to remind people they haven't forgotten and are still investigating. Last month the Internal Revenue Service released updated numbers showing Criminal Investigation (CI) has investigated 1,644 tax and money laundering cases related to COVID fraud potentially totaling $8.9 billion, with well over half that amount coming from cases opened just in the last year.

These cases include a wide range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families, and small businesses under the CARES Act. The CARES Act provided emergency financial assistance to millions of Americans suffering the economic effects of the COVID-19 pandemic.

Special agents from IRS:CI Atlanta Field Office, which covers the states of Alabama, Georgia, Louisiana, and Mississippi, have initiated a combined 159 COVID fraud cases. Over the four states, 89 people have been indicted and 33 people sentenced. The conviction rate for COVID fraud is currently at 100 percent. The average federal prison sentences ranging from 36 to 60 months. The total dollar amount of COVID fraud from cases ranging from investigation initiation to sentencing is near $300 million.

In August 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act of 2022 which established a 10-year statute of limitations for criminal charges and civil enforcement against a borrower who engages in fraud with respect to a Paycheck Protection Program loan.

"The bill extended the statute of limitations from 5 years to 10 years," said Special Agent In Charge, Demetrius Hardeman, Atlanta Field Office. "Many of those who defrauded the program believe they have gotten away with their crime but are probably not aware that we have a lot of time to investigate and hold them accountable for stealing money that rightfully should have gone to those who needed it most."

If you have knowledge of someone defrauding the government the IRS-CI wants to hear from you. IRS-CI encourages the public to share information regarding known or suspected tax and financial fraud.

To report a suspected crime, taxpayers may visit IRS.gov or contact the IRS:CI Atlanta Field Office by email at atlantafieldoffice@ci.irs.gov.

CI is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a nearly 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad. The Atlanta Field Office covers the states of Alabama, Georgia, Louisiana, and Mississippi.

 

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