Originally published Oct. 19 on KTVB.COM.
U.S. Attorney for the District of Idaho, Josh Hurwit, announced the formation of Idaho’s COVID-19 Fraud Task Force on Wednesday.
Nationwide, there is an estimated $100 billion in fraud from COVID relief programs. The task force is made up of 10 federal agencies; its goal is to investigate and prosecute fraud from those COVID relief programs.
“We can say there was an unfortunately large amount of fraud that occurred, not just in Idaho, but throughout the country in these programs,” Hurwit said. “But the vast majority of people and the vast majority of businesses did things the right way, they followed the rules. The criminals that committed these crimes really give a slap in the face to every business, every worker that followed the rules and played by the rules, and we need to hold them accountable.”
Hurwit also aims to recover taxpayer funds that were essentially stolen through pandemic-related fraud.
“I hope that we first of all recoup as much money as we can for Idahoans and American taxpayers. People, individuals, businesses even, stole money from all of us, all of the taxpayers that essentially funded these relief programs to keep our economy going during the pandemic,” Hurwit said. “So, our goal is to hold these criminals accountable, and recover as much of those funds as we can and put them back in the treasury.”
The launch of the task force also came with an announcement that former U.S. House of Representatives candidate Nicholas Jones was sentenced to 30 months in federal prison for wire fraud and filing falsified campaign finance disclosures during his run in 2020.
Jones, who is a small business owner, received $753,000 of COVID relief funds and loans. Hurwit said Jones improperly spent that money to support his lifestyle and political campaign.
Jones was also ordered to pay a $100,000 fine. The U.S. Attorney’s Office has already received a $90,000 restitution payment from Jones.
Hurwit said the task force has been investigating three different types or buckets of fraud:
“The first is people who don’t own a business pretending like they had one, or setting up a new business that’s really a shell in order to get that money, and then usually they spend it on themselves, unrelated to any actual proper purpose,” Hurwit said. “The second bucket would be people who have legitimate business that falsify information about that business. So, inflate their payroll, or inflate their operations so that they can get larger PPP loans than they’re entitled to, and then they misuse that money as well. The third bucket would be legitimate businesses getting these funds for use to pay their workers, to keep their doors open, to pay for their cost of goods. But instead of doing that, using this extra money to buy luxury goods, support their lifestyle, so using it improperly.”
In addition to the Nicholas Jones case, the task force has charged four other criminal cases in the last three months involving fictitious entity schemes. There’s also been a civil filing related to a farm relief program.
“I’ve seen estimates on a nationwide scale of over $100 billion of fraud,” Hurwit said. “The amount of money that was dispersed through the various programs and the congressional acts was about $5 trillion. So, there’s been estimates of $100 billion of that was stolen or misused. In Idaho, we don’t have a specific estimate, but the cases I mentioned, so the five criminal cases and the one civil case, the loss in those cases combined is over $4 million. We’ll expect, as we continue with these efforts, to see that number climb.
Agencies in the task force have been investigating fraud claims since the start of the pandemic.
“We’ve been working with a lot of the agencies that are part of this task force for some time now, but we’ve had a lot of recent successes in terms of prosecuting some cases,” Hurwit said. “So, we’ve formalized the effort into this taskforce, which I’m really proud to say includes 10 separate federal agencies, which is one of the largest task forces we’ve ever had in the district. There’s gonna be a lot of efficiencies, because each of those agencies has something a little bit different to contribute, a little bit different way of looking at the problem and we’re going to build a lot of efficiencies in looking for fraud.”
The 10 agencies that comprise the COVID Fraud Task Force:
- U.S. Small Business Administration, Office of Inspector General
- Internal Revenue Service, Criminal Investigation
- U.S. Department of Treasury, Inspector General for Tax Administration
- Federal Bureau of Investigation
- Federal Deposit Insurance Corporation, Office of Inspector General
- Social Security Administration, Office of Inspector General
- U.S. Department of Agriculture, Office of Inspector General
- U.S. Department of Health and Human Services, Office of Inspector General
- U.S. Postal Inspection Service
- U.S. Secret Service, Boise Resident Agency and Spokane Resident Office
“We want to be clear that the this task force is not out there looking at legitimate businesses, or individuals who did the right thing,” Hurwit said. “We’re not knocking on doors. We are identifying leads based on data from, for example, PPP applications and other sources. Only then does the task force start to dig in and investigate whether there might be something that that is criminal or perhaps a civil violation. This is not a task force that’s going out and doing auditing or random selection of loans to look at. It’s based on indicators of criminal fraud.”
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