Fraudulently obtained US COVID-19 economic relief funds likely amount to hundreds of billions of dollars, although the true scope will never be known, a new report from the Government Accountability Office (GAO) reveals.
Of the 3,096 people, businesses, and other entities the Department of Justice (DOJ) charged with fraud-related crimes as of December 2024, more than 2,500 were found guilty, and more than 2,100 were sentenced. Another 384 await sentencing. Prison sentences have ranged from 1 day to 30 years, but most have been 1 to 5 years. Most swindlers were ordered to pay restitution, which in one case tallied over $71 million, an apparent reference to a California settlement.
"The number of defendants facing criminal fraud-related charges involving pandemic-relief programs continues to increase, as it takes time for new cases to be identified and developed, and hundreds of investigations are still underway," the report authors wrote. "Additionally, extensions to statutes of limitations may contribute to an increase in cases."
The report was ordered under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.2 trillion bill signed into law in March 2020 to help people, small businesses, and industries weather the economic fallout of the COVID-19 pandemic.
More than 650 civil settlements, judgments
The GAO reviewed DOJ case documentation, identifying different kinds of fraud schemes and perpetrators who ripped off 19 or more pandemic-relief programs. In addition to traditional and organized-crime groups, a wide variety of groups and people committed the fraud.
Pandemic-relief programs were critical for assuring public health and economic stability. However, they also created unprecedented opportunities for fraud due to the dollars involved and other risk factors.
"Although criminal prosecutions serve as a key tool in the mission to address pandemic-relief program fraud and recover stolen funds, civil actions offer the government alternative ways to uncover more fraud schemes and recover assets," the GAO wrote.
"According to DOJ, from March 2020 to December 31, 2024, it has secured more than 650 civil settlements and judgments, totaling more than $500 million to resolve allegations of fraud or overpayments in connection with the pandemic-relief programs," they added.
The federal government established interagency groups such as the COVID-19 Fraud Enforcement Task Force and the Pandemic Response Accountability Committee (PRAC) to fight COVID-relief fraud. According to the task force's 2024 report, civil administrative and civil and criminal judicial cases led to the forfeiture of over $1 billion in pilfered funds.
"Pandemic-relief programs were critical for assuring public health and economic stability," the report said. "However, they also created unprecedented opportunities for fraud due to the dollars involved and other risk factors."
Erosion of public trust
In December 2024, the PRAC reported that its task-force efforts led to criminal charges against 111 people and helped the federal government recover more than $16 million.
By examining fraudsters and fraud schemes that emerged during the pandemic, agencies can identify fraud mitigation controls that can be implemented in emergency environments and normal operations.
"Although some individuals might never be swayed from attempting to defraud government programs, agencies can implement deterrence actions—such as emphasizing the consequences of committing fraud and highlighting controls in place—to help prevent future fraudsters," the report said.
"Also, by examining fraudsters and fraud schemes that emerged during the pandemic, agencies can identify fraud mitigation controls that can be implemented in emergency environments and normal operations."
The GAO said its Fraud Risk Framework identifies best practices to help agencies better plan for and take a more strategic approach toward managing fraud risks and has also recommended steps (such as using data analytics) for federal agencies to guard against fraud.
"Beyond financial impacts, fraud erodes public trust in government and hinders agencies' efforts to execute their missions and program objectives effectively and efficiently," the authors wrote. "Therefore, it is important to take steps to prevent fraud from occurring in the first place."
