On April 9, 2024, the United States Department of Justice (DOJ) released a report on the COVID-19 Fraud Enforcement Task Force (“Task Force”), by far DOJ’s most comprehensive review of the Task Force since its creation in 2021. DOJ emphasized that the “time to act is now,” and began the report by asking Congress to extend the statute of limitations for all pandemic fraud-related offenses, in addition to increased funding for investigations and prosecutions. We highlight the following key takeaways:

• The Task Force has charged more than 3,500 defendants with federal crimes, recovered more than $1.4 billion in government funds, and filed more than 400 civil suits that have led to settlements or judgments since May 2021.

• As an inter-agency partnership, the COVID-19 Task Force includes both Criminal and Civil Divisions of DOJ, U.S. Attorney Offices, the FBI, Inspectors General, and federal agencies like the Department of Health and Human Services and the Small Business Administration.

• Featured cases in the report focus on False Claims Act (FCA) liability for companies and individuals involving the Small Business Administration’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), as well as liability for companies that have submitted claims for COVID diagnostic tests to the Health Resources and Services Administration’s COVID-19 Uninsured Program.

• The report signals the Task Force’s enhanced enforcement efforts, as investigations mature and inter-agency communications and coordination improve. Alongside requests for additional congressional support, DOJ seeks to spearhead an effort to establish “a permanent, interagency body to respond to government benefits fraud.”

Key Findings

US Attorney Offices & Civil Division at DOJ Collaboration

U.S. Attorney Offices, in conjunction with the Department’s Civil Division, have opened more than 1,200 civil pandemic fraud matters, which includes more than 600 qui tam cases. Joint investigations have led to more than 400 judgments or settlements amounting to over $100 million in recovery. These cases concern PPP, EIDL, and healthcare fraud involving pandemic-relief programs. In one example, an urgent care clinic agreed to an FCA settlement of $1.6 million for allegedly upcoding claims to Medicare involving the testing and treatment of patients who had suspected exposure to COVID-19.

The report clarified government investigative steps in pandemic fraud enforcement: the Civil Division and U.S. Attorney Offices have begun creating shared database tools to investigate fraud. Investigators have begun their review of “more than 225 million claims paid by the Health Resources and Services Administration’s COVID-19 Uninsured Program and approximately 15 million PPP and EIDL loans,” in order to assess whether companies and individuals followed the rules while submitting claims for government reimbursements.

COVID-19 Fraud Enforcement Strike Force Units

The report covered main actions taken by the five COVID-19 Fraud Enforcement Strike Force units, based in Maryland, the Southern District of Florida, New Jersey, Colorado, and the Eastern and Central Districts of California. Three units were established in 2022, and two were added in 2023. Comprised of prosecutors and agents from the Department of Labor Office of Inspector General, Small Business Administration Office of Inspector General, FBI, and U.S. Secret Service, each Strike Force focuses solely on pandemic-related fraud and receives leads and case intelligence from DOJ’s broader inter-agency network. Relevant cases include multimillion-dollar civil settlements for PPP and EIDL fraud, liability for false claims submitted to the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program, and criminal convictions for unemployment insurance and loan fraud.

Criminal Division’s Fraud Section: Market Integrity and Major Fraud Unit, and Health Care Fraud Unit

The Market Integrity and Major Fraud Unit (MIMF) announced that, since August 2022, it has charged 63 defendants for pandemic-relief fraud involving more than $116 million in alleged loss. The MIMF Unit has also brought 11 pandemic-relief cases to trial. In one prosecution led by MIMF, 16 defendants in the Southern District of Texas were convicted of conspiracy to fraudulently obtain PPP loans, with the lead planner sentenced to 15 years in prison.

The Health Care Fraud (HCF) Unit, also a part of DOJ Criminal Division’s Fraud Section, reported charging 19 defendants for pandemic-relief fraud amounting to $393 million in alleged loss since August 2022. The HCF Unit stated that its focus has been investigating individuals and entities that participated in “COVID-19 testing programs,” including the Center for Medicare and Medicaid Services’ (CMS) COVID-19 over-the-counter test kit demonstrations. From April 2022 to March 2023, CMS paid $1.1 billion for an estimated 101 million over-the-counter COVID-19 tests given to eight million Medicare beneficiaries, with no cost-sharing, through a public health emergency-initiated project demonstration. The HCF Unit has charged schemes including the buying and selling of Medicare beneficiary identification numbers in order to bill Medicare for over-the-counter tests, along with charging entities for the submission of false claims to HRSA COVID-19 Uninsured Program (UIP) for services that were medically unnecessary or not provided.

At a general level, the Fraud Section stressed its commitment “to expand its efforts to combat COVID-19-related fraud” and “maintains it focus on programs created or expanded by the CARES Act,” like the PPP and EIDL programs, Provider Relief Fund programs, and HRSA’s UIP.

The Big Picture Takeaway

The DOJ’s report is detailed, comprehensive, and unique. It’s the first formal report DOJ has published on the Task Force, in contrast to DOJ’s general press releases from previous years. The report is also unique in its appeal to Congress: it states that “legislation is required to” extend the time-limits that prosecutors and whistleblowers have to charge pandemic-related fraud cases while government investigators across agencies continue their work, and that fraud investigations be further resourced beyond current funding levels. The report also seeks to extend the oversight capabilities of the Pandemic Response Accountability Committee, a body of 20 federal Inspectors General who oversee pandemic relief spending.

DOJ’s recent report reflects a committed and determined effort to continue an all-agencies-on-deck approach to prosecuting pandemic relief fraud, an enforcement trend that shows no sign of slowing. In response, companies can reduce exposure risk by initiating due diligence efforts on the scope and nature of their participation in pandemic programs. Companies that proactively review and analyze their routes of exposure, based on dollars received from the government, are best-positioned to navigate this rising tide.

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