And that’s just the tip of the coronavirus fraud iceberg. New Yorkers struggling to feed their families and keep businesses open have lost billions in taxpayer-funded aid. Instead, that money funded the lavish lives of those who defrauded the system, in some cases, according to records and interviews with experts and officials.
“It’s to say that the creation of those pandemic systems has been one of the biggest bribery budgets of all time,” said Jessica Tillipman, associate dean of George Washington University School of Law. “It’s unimaginable how many billions of dollars have been wasted. “
Earlier this year, USA TODAY reporters investigated allegations against the Illinois-based Center for COVID Control and Nomi in Utah and later revealed the company’s role in the government’s random and chaotic reaction to the pandemic that has enriched businesses and deprived the public of critical information.
Despite the lack of participation in the complex and meticulous world of public health, the principles behind the Center for COVID Control and Nomi have managed to generate millions in the pandemic.
Similarly, in New York City, as the government scrambled to locate and steal taxpayer money, USA TODAY investigated the complex internet of public efforts targeting the age-old fraud and government waste that have spread since COVID-19 emerged in March 2020.
In many ways, this taxpayer scam will have monetary implications for generations, potentially hampering long-term aid systems and worsening suffering from the approaching recession, the survey shows.
The investigation investigated a slew of pages of court records, revealing how some scammers used the coronavirus budget to buy everything from luxury Bentley and Mercedes cars to a motel on a trout fishing lake in Missouri and a New Jersey bed and breakfast stylized as a European. castle.
Interviews with two U. S. attorneys in upstate New York districts add to the chutzpah of scammers who targeted the government’s disastrous efforts to shore up the country’s economy amid a global crisis.
Top federal prosecutors presented clues about aid systems that favored timely budget allocation over well-established government accountability rules.
“There was such a rush to expand eligibility and withdraw cash temporarily because other people were suffering so much,” said U. S. District Attorney Carla Freedman. U. S. Department of State in Syracuse, New York.
“This provided an opportunity for criminals who otherwise wouldn’t have been able to get away with it or, frankly, never had the idea to do so,” he added, noting that the government will continue the fraud for years to come.
But the troubling repercussion will be the role this widespread fraud plays in shaping public belief in government.
“When you see your money wasted and the government is ineffective, you lose religion in government, elected representatives and democracy,” said Shruti Shah, president and CEO of the Coalition for Integrity, a government watchdog.
“It’s all taxpayer money, and the money deserves to have been used to help those in need,” he added.
A scathing audit released this month also criticized state Department of Labor officials for failing to update the unemployment insurance system that has long been in trouble, contributing to about $11 billion in unemployment lost to fraud in the first year of the pandemic.
“The company used affirmative action to cover up the issues, and it proved costly for the state, businesses and New Yorkers,” State Comptroller Thomas DiNapoli said in a report on unemployment fraud.
State officials involved in the surveillance effort declined interview requests for this report and rejected some written questions, bringing up ongoing investigations.
To fully understand the history of coronavirus fraud in New York City, the large amounts of emergency investment that flow through relief programs.
For example, nearly five million New Yorkers earned about $10. 5 billion in unemployment benefits, which included an additional budget in the event of a pandemic. That equates to about 50 years of benefits in two years, state officials said.
Meanwhile, a total of 1. 1 million New Yorkers and state entities obtained other loans and assistance for the pandemic, averaging about $102,000, according to federal data.
However, the staggering number of pandemic frauds in New York City, in some respects, is only beginning to highlight the prism of the scam cases exposed so far.
Many of the schemes were hatched through other people familiar with the crime who took the news of the $2. 2 trillion economic security, aid, relief, and coronavirus law in late March 2020 in the form of a blatant neon sign signaling “Free money. “
The online loan application process, which was first shrouded in secrecy because Trump’s management at the time refused to publicly disclose the applicant’s fundamental details, has only added one friend to the fraudulent sharks.
“It’s partly an opportunity, and it’s pretty simple because you can do it from your home and from your computer,” said U. S. Attorney Trini Ross in Buffalo.
“There are only other people who will see weaknesses in the systems put in place to help other people,” he added.
While virtual fraud increased in recent decades, the combination of lockdowns, coronavirus issues, and a large amount of aid budget, the pandemic amplified the problem. In-person verification of applicants’ claims and other fraud checks all but failed the first COVID-19 outbreaks.
To quell the tsunami of fraud, the federal Justice Ministry has dozens of prosecutors and investigators to catch coronavirus-related crimes.
Among the effects of previous national repression this year:
As government checks poured in, some small business owners filed false documents inflating their eligibility to illegally unload millions of dollars in pandemic loans.
Others, a cottage industry, which generates fake loan programs and unemployment benefits. Social media and text messages swayed among accomplices, sharing jokes about their newfound wealth at taxpayers’ expense.
Foreign-based street gangs and crime syndicates have just added coronavirus fraud to their long list of criminal enterprises. Some of them have posted rap videos and songs online promoting their COVID-19 relief programs. doors to register false claims in your name.
Several of the most prominent cases involved are worth extorting and deals with fake sources such as private protective devices and shortages of medical supplies, as well as COVID-19 test kits.
Bank officials and state workers are also charged with pandemic cash theft, adding a worker at the state-run hard work branch who pleaded guilty to a nearly $900,000 unemployment fraud scheme.
“These are the types of instances that, of course, we need to prioritize because those are other people in the same way that police officers have a point of accepting as true and some access,” Freedman said. By highlighting prosecutions of capricious officials, he added, he is helping to restore public confidence in government.
While the government has seized piles of money, a yacht, firearms and other ill-gotten gains, prosecutors warned this year that egregious fraud would go unpunished because of statutes of limitations.
In other words, so much pandemic aid was stolen that many other people were able to wait for the clock to run out and avoid prosecution. As a result, federal lawmakers and President Joe Biden extinguished the 10-year statute of limitations in August.
“My message to those cheaters is: you can’t hide. We will locate them. We’re going to get back what they stole and hold them accountable under the law,” Biden said.
However, even though more time is needed to seek justice, the government is struggling to fill the first gaps in reporting and tracking pandemic assistance. And recovering the stolen budget becomes more complicated as time goes on and thieves burn your loot.
“A lot of other people will get away with it, and all you can do is stay snacking,” Tillipman said.
Meanwhile, it appears that coronavirus relief systems have ignored lessons learned from countless government surveillance reports on fraud beyond emergencies, such as the requirement for immediate publication of enforcement main points and politically independent oversight committees.
While the government has, regardless, implemented many of those most effective practices to combat fraud, the initial missteps may ultimately influence the total amount of fraud, which experts say will remain unclear for months or even years.
But a recent policy replacement to cancel many Paycheck coverage program loans of $100,000 or less may undermine efforts to combat fraud and waste, according to a note from the Office of Inspector General last month.
Regulators have to avoid recovering loans of $100,000 or less. These loans totaled nearly $229 billion, or about 29% consistent with the overall program percentage. “unprofitable. “
Government watchdogs, however, have raised concerns about the resolution to impede long-term attempts through aid schemes to obtain loans and restrict liability.
In the midst of the debate, Freedman pointed out that other people who had filed fake loan programs of all sizes were breaking federal law, regardless of pardon measures.
“They shouldn’t think they won’t get caught; we’re still investigating people,” Freedman said.
The Freedman district, for example, has about 50 active coronavirus fraud investigations across large swaths of the state’s northern component. In the past, it has imposed charges in 21 cases, covering more than $17 million in actual losses to the government, of which about $12 million is recovered through seized assets and court orders.
“Most criminals engage in crime because they will flee, but fortunately Array. . . most of the time they don’t,” Freedman said.
At the state level, many facets of the pandemic response are still being investigated, adding up to billions of dollars in state contracts awarded since 2020.
At the heart of this effort is the fact that emergency orders issued by Gov. Kathy Hochul and her predecessor, Andrew Cuomo, waived reviews prior to the approval of many contracts through the State Comptroller’s Office.
As a result, high-profile examples abound of scammers and corporations that have damaged state contracts for everything from fans and private protective appliances to utilities.
So far, the State General Service Office, which oversees many state contracts, has known of 12 state contracts similar to COVID-19 that referred to potential fraudulent activities and referred them to the state attorney general for review and possible legal action, the firm said in a statement. declaration.
The attorney general’s office declined to provide details on references to state contracts, noting that some of the transactions have sparked ongoing litigation and others are still under investigation.
A review of court records revealed that the Attorney General’s Office had sued at least five state contracts similar to the COVID-19 response. The lawsuits seek reimbursement of $56. 4 million from corporations that allegedly failed to deliver thousands of ventilators and medical gowns in the initial outbreak of the pandemic in the spring of 2020.
Overall, the General Service Office has controlled 29 COVID-related contracts totaling $644 million, and the firm has spent about $99 million so far on those contracts, he said.
Before Hochul ended New York’s COVID-19 emergency order in September, many Republican lawmakers had criticized the Democratic governor for extending the emergency order in the past, as he eased many pandemic restrictions earlier this year.
The setback was fixed amid bipartisan questions about New York paying $637 million for COVID-19 checkkits while Omicron raged last winter. to the Hochul campaign, as first reported through the Times Union.
In addition, some state spending on emergency appliances, such as ventilators and X-ray machines, has also proved unnecessary in retrospect, as medical wishes have particularly replaced the pandemic. In the end, New York paid about $250 million for thousands of those devices that are now unused on garage premises, as first reported via Politico.
The state comptroller’s office declined an interview request for this article, noting that it is recently auditing how state agencies have treated unemployment benefits and ventilator purchases during the pandemic.
Addressing fraud and waste in New York, Tillipman said that “no organization or government is ever safe from waste and fraud” despite stricter oversight and enforcement. But mistakes in the response to the pandemic in New York and nationally, he said, will have painful ripple effects.
“Ultimately, it damages the systems of the other people who love it most,” he added.
Follow David Robinson on Twitter: @DrobinsonLoHud.
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