GAO-24-106353, COVID-19: Insights from Fraud Schemes and Federal Response Efforts

Report — GAO-24-106353, COVID-19: Insights from Fraud Schemes and Federal Response Efforts, dated 2023-06-30, issued by Government Accountability Office.

Full text

COVID-19
Insights from Fraud
Schemes and Federal
Response Efforts

Report to Congressional Committees
November 2023

GAO-24-106353

United States Government Accountability Office

 United States Government Accountability Office

Highlights of GAO-24-106353, a report to
congressional committees

November 2023
COVID-19
Insights from Fraud Schemes and Federal Response
Efforts
What GAO Found
The Department of Justice (DOJ) has brought federal fraud-related charges
against at least 2,191 individuals or entities in cases involving federal COVID-19
relief programs, consumer scams, and other types of fraud as of June 30, 2023.
Based on GAO’s analysis of the cases announced in DOJ press releases, at
least 1,525 individuals or entities facing fraud-related charges were found guilty
or liable. Courts have ordered individuals to pay restitution ranging up to over
$60 million and serve prison terms up to 10 years or more. GAO’s analysis of
fraud schemes highlights the resulting financial losses and impacts on taxpayers,
agency reputation, federal program goals, and health and safety. Agencies can
use information about schemes to improve their fraud risk management efforts.
Examples of Fraud Schemes Involving Federal COVID-19 Relief Programs or Consumer Scams
Key mechanism
Fraud scheme description

Conspiracy
A group allegedly conspired to obtain more than $240 million from a
federal child nutrition program in a complex fraud scheme. Individuals
colluded to open shell companies acting as program sites to claim
they were serving thousands of meals a day to underserved children
during the pandemic. Instead, these funds were diverted for self-
enrichment. Four individuals pleaded guilty but have not been
sentenced. Over 40 others are awaiting trial.

Misrepresentation

Two company owners attempted to obtain a total of $5 million by
applying for 14 Paycheck Protection Program loans and 12 COVID-19
Economic Injury Disaster Loans. They submitted fabricated tax and
other documents inflating the companies’ number of employees and
payroll. The owners received almost $650,000 in funds they used for
personal items, such as a luxury car. Both pleaded guilty, were
ordered to pay more than $800,000 in restitution, and were sentenced
to 2 to 3 years in prison.

Mislabeling

A company owner sold and mailed pesticide marketed as an air
purifier to kill airborne viruses such as COVID-19. The product
contained sodium chlorite, a substance declared unmailable under
U.S. postal regulations because of its propensity to cause a fire or
explosion. The owner was sentenced to 8 months in prison and
ordered to pay a total penalty of $556,443 through restitution, fines,
and forfeiture.

Health care fraud
A licensed medical practitioner pleaded guilty to selling homeopathic
immunizations, falsely claiming they provided immunity to COVID-19.
She received over $74,000 for fabricated COVID-19 vaccination and
immunization records, knowing this would mislead school officials
enforcing the state’s vaccination laws. She was sentenced to almost 3
years in prison.
Source: GAO Antifraud Resource and analysis of court documentation (information); Icons-Studio/stock.adobe.com (icons).  |  GAO-24-
106353
Various interagency task forces and the Pandemic Response Accountability
Committee (PRAC) were established to combat COVID-19 fraud. For example,
the COVID-19 Fraud Enforcement Task Force conducted an enforcement sweep
and reported taking law enforcement actions against fraudsters responsible for
approximately $836 million in fraud. Similarly, the PRAC estimated its information
and resource sharing with investigative agencies supported hundreds of criminal
convictions and the recovery of more than $1 billion.
View GAO-24-106353. For more information,
contact Rebecca Shea at (202) 512-6722 or
shear@gao.gov.
Why GAO Did This Study
Since March 2020, Congress provided
over $4.6 trillion to help the nation
respond to and recover from the
COVID-19 pandemic. The public health
crisis, economic instability, and
increased flow of federal funds
associated with the pandemic
increased pressures on federal agency
operations and presented opportunities
for individuals to commit fraud. The
COVID-19 pandemic saw an increase
in the number of fraud-related charges,
including schemes by individuals and
large complex syndicates.
The CARES Act of 2020 includes a
provision for GAO to report regularly
on the federal response to the
pandemic.
This report describes: (1) the status of
federal COVID-19 fraud-related cases
announced by DOJ, including
examples of fraud schemes and (2)
examples of federal efforts that have
been taken to combat COVID-19 fraud.
GAO reviewed public statements from
DOJ from March 2020 through June
2023 to identify federal fraud-related
cases. Specifically, GAO identified
cases involving COVID-19 relief
program fraud; consumer scams; and
other types of fraud. GAO then
analyzed court documents for details
on fraud schemes. GAO also reviewed
federal agency documentation and
rules, proposed legislation, and
proposed antifraud efforts.
What GAO Recommends
In March 2022, GAO identified 10
actions Congress could take to
strengthen internal controls and
financial and fraud risk management
practices across the government. All
10 remain open.

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GAO-24-106353  COVID-19
Letter

1
Background
3
DOJ Has Prosecuted Over Two Thousand COVID-19 Fraud-
Related Cases, and the Schemes Illustrate a Variety of
Participants, Mechanisms, and Impacts
12
Pandemic Oversight Entity, Interagency Task Forces, and Federal
Resources Have Been Established to Combat COVID-19 Fraud
24
Appendix I
GAO Contact and Staff Acknowledgments
34

Tables
Table 1: Key Federal COVID-19 Relief Programs and Funding
4
Table 2: Examples of Fraud Schemes Affecting Federal COVID-
19 Relief Programs
17
Table 3: Examples of Schemes Involving Consumer Scams
Related to COVID-19
20
Table 4: Examples of Other Fraud Schemes Related to COVID-19
23

Figures
Figure 1: Stages of Fraud Detection
6
Figure 2: The Four Components of the Fraud Risk Framework and
Selected Leading Practices
9
Figure 3: Framework for Managing Improper Payments in
Emergency Assistance Programs
11
Figure 4: Number of Individuals or Entities That Were Found
Guilty or Liable for Fraud-Related Charges Involving One
or More COVID-19 Relief Programs, as of June 30, 2023
13
Figure 5: Sentencing Outcomes for Individuals or Entities That
Were Found Guilty or Liable for Fraud-Related Charges
Involving COVID-19 Relief Programs, as of June 30,
2023
14
Figure 6: Court Ordered Restitution for Individuals or Entities That
Were Found Guilty or Liable for Fraud-Related Charges
Involving COVID-19 Relief Programs, as of June 30,
2023
15

Contents

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GAO-24-106353  COVID-19

Abbreviations

COVID-19 EIDL
COVID-19 Economic Injury Disaster Loan
DOJ

Department of Justice
DOL

Department of Labor
EIP

economic impact payment
FBI

Federal Bureau of Investigation
Fraud Risk

A Framework for Managing Fraud Risks in
   Framework
Federal Programs
FRDAA

Fraud Reduction and Data Analytics Act of 2015
FTC

Federal Trade Commission
HEERF

Higher Education Emergency Relief Fund
HHS

Department of Health and Human Services
HRSA

Health Resources and Services Administration
IFFR

Identity Fraud Reduction & Redress
IRS

Internal Revenue Service
Managing Improper  A Framework for Managing Improper Payments
   Payments

in Emergency Assistance Programs
   Framework
NUIFTF
National Unemployment Insurance Fraud Task
Force
OIG

Office of Inspector General
OMB

Office of Management and Budget
PACE

Pandemic Analytics Center of Excellence
PACER

Public Access to Court Electronic Records
PIIA

Payment Integrity Information Act of 2019
PPP

Paycheck Protection Program
PRAC

Pandemic Response Accountability Committee
SBA

Small Business Administration
UI

unemployment insurance
USDA

Department of Agriculture

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GAO-24-106353  COVID-19
441 G St. N.W.
Washington, DC 20548
November 14, 2023
Congressional Committees
Since March 2020, Congress has provided over $4.6 trillion to help the
nation respond to and recover from the COVID-19 pandemic. The
government’s quick disbursement of funds and other assistance to those
most affected by the pandemic and its economic effects also increased
the risk of fraud to COVID-19 relief programs. When the federal
government provides emergency assistance, the risk of payment errors—
including those attributed to fraud—may increase because the need to
provide this assistance quickly can lead agencies to relax or forego
effective safeguards. Because not all fraud will be identified, investigated,
and adjudicated through judicial or other systems, the full extent of fraud
associated with the COVID-19 relief funds will never be known with
certainty.
Despite challenges identifying the full extent of fraud, some estimates of
fraud in COVID-19 relief programs exist. For instance, the Small Business
Administration’s (SBA) Office of Inspector General (OIG) estimated that
as of June 2023, SBA disbursed over $200 billion (approximately 17
percent of SBA’s total COVID-19 spending) in potentially fraudulent
pandemic relief loans.1 In September 2023, we estimated that the fraud in
the Department of Labor’s (DOL) unemployment insurance (UI) programs
during the pandemic—from April 2020 through May 2023—was likely
between $100 billion and $135 billion.2
Many individuals and entities facing fraud-related charges in cases
involving COVID-19 relief programs have already been found guilty of
criminal violations or were found liable for civil violations.
In addition to fraud in the COVID-19 relief programs, scammers have also
targeted consumers. Such scams can result in financial losses and
undermine health and safety. According to the Department of Health and

1This includes Paycheck Protection Program (PPP) loans, COVID-19 Economic Injury
Disaster Loan (COVID-19 EIDL) program loans, EIDL Targeted Advances, and
Supplemental Targeted Advances. GAO, COVID Relief: Fraud Schemes and Indicators in
SBA Pandemic Programs, GAO-23-105331 (Washington, D.C.: May 18, 2023).
2GAO, Unemployment Insurance: Estimated Amount of Fraud during Pandemic Likely
Between $100 Billion and $135 Billion, GAO-23-106696 (Washington, D.C.: Sept. 12,
2023).
Letter

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Human Services OIG, COVID-19 consumer fraud schemes include
scammers using testing sites, telemarketing calls, text messages, social
media platforms, and door-to-door visits to perpetrate COVID-19-related
scams. In some instances, fraudsters offer COVID-19 services such as
home testing kits in exchange for personal details, including Medicare
information. The personal information collected can be used to
fraudulently bill federal health care programs and commit medical identity
theft.
The CARES Act includes a provision for GAO to report regularly on the
federal response to the pandemic. Specifically, the act requires us to
monitor and oversee the federal government’s efforts to prepare for,
respond to, and recover from the COVID-19 pandemic.3 This report
describes: (1) the status and characteristics of federal COVID-19 fraud-
related cases announced by the Department of Justice (DOJ) and (2)
examples of federal efforts that have been taken to address COVID-19
fraud.
To determine the status and characteristics of federal COVID-19 fraud-
related cases announced by DOJ, we reviewed public statements from
DOJ from March 2020 through June 2023 to identify federal fraud-related
cases.4 Specifically, we identified cases involving: (a) various federal
COVID-19 relief programs (e.g., Paycheck Protection Program (PPP),
COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) program,
and UI); (b) consumer scams (i.e., fraud resulting in losses to consumers
or other efforts to undermine health and safety); and (c) other types of
fraud related to COVID-19, such as cases involving health care fraud. We
identified these cases by establishing a search query for Westlaw Edge to
identify relevant DOJ press releases. We also analyzed corresponding
court documentation available in Public Access to Court Electronic

3Pub. L. No. 116-136, § 19010(b), 134 Stat. 281, 580 (2020). All of GAO’s reports related
to the COVID-19 pandemic are available on GAO’s website at
https://www.gao.gov/coronavirus.
4These statements from DOJ sometimes announce cases in the later stages of
prosecution. For example, an individual’s guilty plea may be announced without an earlier
public statement announcing the charges being brought. If those charges were brought
from March 2020 through June 2023 but the guilty plea was announced in August 2023,
that case would not be included in the scope of our review since the public statement was
made after June 2023.

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Records (PACER) to describe various examples of federal COVID-19
fraud-related cases in terms of the five key elements of a fraud scheme.5
To describe examples of federal efforts that have been taken to address
COVID-19 fraud, we reviewed agency rules and documentation,
proposed legislation, and antifraud efforts. Examples were selected to
cover the range of COVID-19 relief programs and types of fraud that
occurred. They are not exhaustive of all federal efforts to address COVID-
19 fraud, but rather are illustrative of different types of government-wide
efforts undertaken since the beginning of the pandemic.
We conducted this performance audit from October 2022 to November
2023 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.

Since March 2020, Congress has provided over $4.6 trillion through the
CARES Act and other laws that were enacted to fund federal efforts to
help the nation respond to and recover from the COVID-19 pandemic.6
This COVID-19 relief funding included a number of programs and funds.
Key federal COVID-19 relief programs and funding are described in table
1.

5PACER is a service of the federal judiciary that enables the public to search online for
case information from U.S. district, bankruptcy, and appellate courts. Federal court
records available through this system include case information (such as names of parties,
proceedings, and documents filed) as well as information on case status. The five key
elements reflect the highest-level components of the Conceptual Fraud Model.
Systematically organized subcomponents of the full model are available for download and
exploration from GAO’s Antifraud Resource website. GAO, “The GAO Antifraud Resource”
(Washington, D.C.: Jan. 10, 2022), accessed Oct. 4, 2023,
https://gaoinnovations.gov/antifraud_resource/.
6American Rescue Plan Act of 2021, Pub. L. No. 117-2, 135 Stat. 4; Consolidated
Appropriations Act, 2021, Pub. L. No. 116-260, div. M and N, 134 Stat. 1182 (2020);
Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139,
134 Stat. 620 (2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020); Families
First Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 178 (2020); and the
Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L.
No. 116-123, 134 Stat. 146.
Background
COVID-19 Relief Funding

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Table 1: Key Federal COVID-19 Relief Programs and Funding
Small Business Administration
(SBA)

SBA’s Paycheck Protection Program (PPP) was authorized under SBA’s 7(a) small business
lending program. This program provided small businesses with funds to pay up to 8 weeks of
payroll costs, including benefits. Funds could also be used to pay interest on mortgages, rent, and
utilities. Congress provided over $800 billion for this program.
SBA’s COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) program, which was a
continuation of SBA’s existing Disaster Loan Program, provided low-interest loans to help small
businesses and non-profit organizations meet obligations or pay ordinary and necessary operating
expenses. Congress provided about $105 billion for this program.
Department of Labor (DOL)

DOL’s unemployment insurance (UI) programs served as a pandemic safety net for individuals
who lost their jobs through no fault of their own. Congress provided $701.6 billion for four
temporary UI programs.
Department of the Treasury
and Internal Revenue Service
(IRS)

Treasury’s Coronavirus Relief Fund provided payments to tribal governments, states, localities,
the District of Columbia, and U.S. territories to help offset costs of their response to the COVID-19
pandemic. Congress provided $150 billion for this program.
Treasury’s Emergency Rental Assistance program provided funding to grantees, such as local
governments, to help low-income households at risk of housing instability pay rent and utilities.
Congress provided about $46 billion for this program.
Treasury’s and IRS’s economic impact payments were enacted as a stimulus payment from the
IRS to help taxpayers offset the economic effects of the COVID-19 pandemic. Congress provided
nearly $860 billion for this program.
Department of Agriculture
(USDA)

USDA’s Coronavirus Food Assistance Program provided financial assistance to farmers and
ranchers that gave them the ability to offset sales losses and increased marketing costs. Congress
provided about $31 billion for this program.
USDA’s child nutrition programs received additional funding for COVID-19 to provide meals to
children involved in educational-based programs or activities. Congress provided $8.8 billion for
these programs.
Department of Health and
Human Services (HHS)

HHS’s Health Resources and Services Administration’s (HRSA) Provider Relief Fund awarded
grants to eligible health care providers for health care related expenses or lost revenues that were
attributable to the COVID-19 pandemic. Congress provided approximately $178 billion for this
program.
HRSA’s COVID-19 Uninsured Program reimbursed health care providers generally at Medicare
rates for testing, treating, and administering vaccines to uninsured individuals for COVID-19. The
federal government has paid providers about $24.5 billion for program claims.
Department of Education

The Department of Education’s Higher Education Emergency Relief Fund enabled colleges and
universities to provide cash grants to current students for educational related expenses and costs
incurred because of disruptions to their education. Congress provided about $14 billion for this
program.

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Federal Reserve

The Federal Reserve established the Main Street Lending Program to support lending to small
and medium-sized for-profit businesses and non-profit organizations. Treasury made about $13.9
billion available under the CARES Act to support the Main Street Lending Program facilities. Under
the program, five facilities in total were designed to support small and mid-sized for-profit
businesses and non-profit organizations by purchasing participations in eligible loans.a
Source: GAO analysis; SBA, DOL, Treasury, IRS, USDA, HHS, Department of Education, Federal Reserve (agency seals). | GAO-24-106353
Note: This table does not include all federal programs enacted to address COVID-19 related issues.
Also, we use the term COVID-19 relief programs to refer to the programs and assistance outlined in
six laws to help the nation respond to and recover from the COVID-19 pandemic. These six COVID-
19 relief laws are the American Rescue Plan Act of 2021, Pub. L. No. 117-2, 135 Stat. 4;
Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, div. M and N, 134 Stat. 1182 (2020);
Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620
(2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020); Families First Coronavirus Response
Act, Pub. L. No. 116-127, 134 Stat. 178 (2020); and the Coronavirus Preparedness and Response
Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat. 146. For the purposes of our
review, COVID-19 relief funding is the cumulative amount of funding provided in the COVID-19 relief
laws. Consequently, the COVID-19 relief funding amounts reported in this report do not reflect the
permanent rescissions enacted in the Fiscal Responsibility Act of 2023, Pub. L. No. 118-5, 137 Stat.
10.
aThe Main Street Lending Program comprised five facilities: the Main Street New Loan Facility, Main
Street Priority Loan Facility, Main Street Expanded Loan Facility, Nonprofit Organization New Loan
Facility, and Nonprofit Organization Expanded Loan Facility. The Federal Reserve Bank of Boston
administers the Main Street Lending Program.

Fraud. Fraud involves obtaining something of value through willful
misrepresentation. Willful misrepresentation can be characterized by
making material false statements of fact based on actual knowledge,
deliberate ignorance, or reckless disregard of falsity. Whether an act is
fraudulent is determined through the judicial or other adjudicative system.
Fraud is challenging to detect because of its deceptive nature. As a
result, not all fraudulent activity will be detected or discovered. Generally,
once potential fraud is detected and investigated, DOJ may bring charges
of fraud against the alleged fraudster.
If a court determines that fraud took place, then fraudulent spending may
be recovered through various means. However, recoveries are often a
fraction of fraud losses and some amounts may never be recovered.
Fraud can also involve benefits that are non-financial in nature. While this
type of fraud does not result in a direct financial loss to the government, it
can have other impacts such as on trust in government and an agency’s
reputation. It can also create national security, criminal, health, safety,
and other risks.
Fraud, Fraud Risk
Management, and
Managing Improper
Payments in Emergency
Assistance Programs

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Figure 1 illustrates stages of fraud identification, including the known—
detected potential fraud and adjudicated fraud—and unknown aspects of
fraud.
Figure 1: Stages of Fraud Detection

Fraud risk management. We have reported that federal agencies did not
strategically manage fraud risks and were not adequately prepared to

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prevent fraud when the pandemic began.7 Fraud risk is greatest when
individuals have an opportunity to engage in fraudulent activity, have an
incentive or are under pressure to commit fraud, or are able to rationalize
committing fraud. When fraud risks can be identified and mitigated, fraud
may be less likely to occur. Although the occurrence of fraud indicates
there is a fraud risk, the risk can exist even if actual fraud has not yet
happened.
The public health crisis, economic instability, and increased flow of
federal funds associated with the COVID-19 pandemic increased
pressures on federal agency operations and presented opportunities for
individuals to commit fraud. The heightened risk and prevalence of fraud
in various COVID-19 relief programs underscore the importance of
prevention and imperative for federal agencies to manage fraud risks
strategically.
In our March 2022 testimony before the Senate Committee on Homeland
Security and Governmental Affairs, we identified 10 actions that Congress
could take to strengthen internal controls and financial and fraud risk
management practices across the government.8 For example, we
suggested Congress (1) establish a permanent analytics center of
excellence to aid the oversight community in identifying improper
payments and fraud; (2) amend the Social Security Act to make
permanent the sharing of full death data with the Department of the
Treasury’s Do Not Pay working system; and (3) reinstate the requirement
that agencies report on their antifraud controls and fraud risk
management efforts in their annual financial reports, among other actions.
These matters for congressional consideration remain open. We continue
to believe that such actions will increase accountability and transparency
in federal spending in both normal operations and emergencies.
To help federal program managers strategically manage their fraud risks
during both normal operations and emergencies, we published A
Framework for Managing Fraud Risks in Federal Programs (Fraud Risk

7GAO, Emergency Relief Funds: Significant Improvements Are Needed to Address Fraud
and Improper Payments, GAO-23-106556 (Washington, D.C.: Feb. 1, 2023).
8GAO, Emergency Relief Funds: Significant Improvements Are Needed to Ensure
Transparency and Accountability for COVID-19 and Beyond, GAO-22-105715
(Washington, D.C.: Mar. 17, 2022).

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Framework) in July 2015.9 A provision of the Payment Integrity
Information Act of 2019 (PIIA) requires the Office of Management and
Budget (OMB) to maintain guidelines for agencies to establish financial
and administrative controls to identify and assess fraud risks and that
incorporate leading practices from GAO’s Fraud Risk Framework.10 OMB
Circular A-123, Management’s Responsibility for Enterprise Risk
Management and Internal Control implements this requirement and
directs agencies to follow the leading practices outlined in the Fraud Risk
Framework.11
The Fraud Risk Framework describes leading practices in four
components: commit, assess, design and implement, and evaluate and
adapt, as depicted in figure 2.

9GAO, A Framework for Managing Fraud Risks in Federal Programs, GAO-15-593SP
(Washington, D.C.: July 28, 2015).
10The Fraud Reduction and Data Analytics Act of 2015 (FRDAA) originally required OMB
to establish these guidelines for agencies in 2016. Pub. L. No. 114-186, 130 Stat. 546
(2016). FRDAA was repealed and replaced by PIIA in 2020. PIIA requires these
guidelines to remain in effect, subject to modification by OMB as necessary, and in
consultation with GAO. Pub. L. No. 116-117, § 2(a), 134 Stat. 113, 131 - 132 (2020),
codified at 31 U.S.C. § 3357.
11In October 2022, OMB issued a Controller Alert reminding agencies that consistent with
the guidelines contained in OMB Circular A-123, they must establish financial and
administrative controls to identify and assess fraud risks. In addition, OMB reminded
agencies that they should adhere to the leading practices in GAO’s Fraud Risk Framework
as part of their efforts to effectively design, implement, and operate an internal control
system that addresses fraud risks. OMB, CA-23-03, Establishing Financial and
Administrative Controls to Identify and Assess Fraud Risk (Oct. 17, 2022).

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Figure 2: The Four Components of the Fraud Risk Framework and Selected Leading
Practices

To further assist federal managers in their efforts to manage fraud risk,
we created the online Antifraud Resource to help federal officials and the
public better understand and combat federal fraud.12 The Antifraud
Resource provides insight on fraud schemes that affect the federal
government, their underlying concepts, and how to combat such fraud,
and is based on a conceptual model of fraud in the federal government.13
The conceptual fraud model identifies five key elements of fraud
schemes: (1) affected federal programs or operations; (2) participants
(those involved in the execution of the scheme and those affected by it);
(3) types of fraud activities (e.g., wire fraud, grant fraud, identity fraud); (4)
mechanisms (processes, techniques, or systems used to execute the
activity); and (5) impacts (financial or non-financial). We describe COVID-
19 fraud cases in terms of the five key elements of a fraud scheme in this
report.
Managing improper payments in emergency assistance programs.
Our oversight of emergency assistance programs—including COVID-19

12https://gaoinnovations.gov/antifraud_resource/.
13The Conceptual Fraud Model is organized as an “ontology.” An ontology is an explicit
description of categories in a subject area and their characteristics, as well as the
relationships among them. To develop our fraud model, we collected, reviewed, and
analyzed multiple sources of information, including over 200 adjudicated federal criminal
and civil fraud cases to validate and refine the fraud model.

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relief programs—has identified substantial shortcomings in agencies’
application of fundamental internal controls as well as fraud risk
management practices. These shortcomings can result in significant
improper payments—payments that should not have been made or were
made in the incorrect amount as a result of mismanagement, errors,
abuse, or fraud. While all payments resulting from fraudulent activity are
considered improper, not all improper payments are the result of fraud.
When the federal government provides emergency assistance, the risk of
improper payments may be higher than in non-emergency programs
because the need to provide such assistance quickly can detract from the
planning and implementation of effective controls. Our past work has
shown that federal agencies should better plan for and take a more
strategic approach to managing improper payments in emergency
assistance programs. In response, in July 2023, we published A
Framework for Managing Improper Payments in Emergency Assistance
Programs (Managing Improper Payments Framework) to help Congress
and federal program managers.14 This framework includes leading
practices to help federal agencies combat improper payments, including
those stemming from fraud, in emergency and non-emergency programs
before they occur. It includes an overall five-step approach described in
figure 3.

14GAO, A Framework for Managing Improper Payments in Emergency Assistance
Programs, GAO-23-105876 (Washington, D.C.: July 13, 2023). This framework should be
used by federal agencies in conjunction with existing requirements related to managing
improper payment, including those stemming from fraud.

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Figure 3: Framework for Managing Improper Payments in Emergency Assistance
Programs

This approach includes principles that align with leading practices
described in our Fraud Risk Framework, such as identifying and
assessing fraud risks that cause improper payments.

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At least 1,399 individuals or entities were found guilty or liable in cases
involving federal COVID-19 relief programs, based on our analysis of
DOJ’s public statements and court documentation from March 2020
through June 2023.15 The cases with findings of guilt or liability involve
COVID-19 relief programs such as SBA’s PPP and COVID-19 EIDL
program, DOL’s UI programs, and Treasury’s economic impact payments
(see fig. 4).

15The federal government may enforce laws through civil or criminal action. Such action
may be resolved through a trial, a permanent injunction, a civil settlement, or a guilty plea.
Our analysis is limited to the cases we identified from public sources and may not include
all criminal and civil cases charged by DOJ as of June 30, 2023. Additionally, details of
fraud cases and schemes presented in court documents may not be complete. Further,
cases that reach the prosecution stage in the fraud identification lifecycle represent a
fraction of the instances of fraud or all possible fraud cases.
DOJ Has Prosecuted
Over Two Thousand
COVID-19 Fraud-
Related Cases, and
the Schemes
Illustrate a Variety of
Participants,
Mechanisms, and
Impacts
About 1,400 Fraud-
Related Cases Involving
COVID-19 Relief
Programs Have Resulted
in Findings of Guilt

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Figure 4: Number of Individuals or Entities That Were Found Guilty or Liable for Fraud-Related Charges Involving One or More
COVID-19 Relief Programs, as of June 30, 2023

Note: The federal government may enforce laws through civil or criminal action. Such action may be
resolved through a trial, a permanent injunction, a civil settlement, or a guilty plea.

Of the individuals found guilty, at least 1,051 had been sentenced as of
June 30, 2023 (see fig. 5). The range in length of prison sentencing varies

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in part based on other relevant factors, such as prior convictions and
whether there were other charges in addition to COVID-19 related fraud.16
Figure 5: Sentencing Outcomes for Individuals or Entities That Were Found Guilty
or Liable for Fraud-Related Charges Involving COVID-19 Relief Programs, as of
June 30, 2023

Note: Some of these individuals or entities were sentenced for additional charges not related to
COVID-19 relief programs. In addition to prison time, sentences can include restitution, fines, or other
fees. The federal government may enforce laws through civil or criminal action. Such action may be
resolved through a trial, a permanent injunction, a civil settlement, or a guilty plea.
aThese individuals were sentenced to time served, supervised release, or probation but no prison
sentence.

Some individuals and entities found guilty have also been ordered to pay
restitution and fines. Courts ordered restitution amounts ranging from

16Courts refer to the United States Sentencing Commission Guidelines to determine the
particular sentence in each individual case. Under 28 U.S.C. § 994, the Guidelines should
reflect a variety of factors and considerations to determine an appropriate sentence. The
Guidelines set a base offense level and then add or subtract levels due to aggravating or
mitigating circumstances, such as the dollar amount of the loss caused by offense and the
defendant’s criminal history, ultimately arriving at a suggested sentencing range.
Additionally, many of the defendants we reviewed were convicted on additional charges
beyond fraud against COVID-19 relief programs, which would impact the length of their
sentences.

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zero to over $60 million. Individuals or entities in over 200 cases were
ordered to pay $1 million or more in restitution (see fig. 6).
Figure 6: Court Ordered Restitution for Individuals or Entities That Were Found
Guilty or Liable for Fraud-Related Charges Involving COVID-19 Relief Programs, as
of June 30, 2023

Note: The federal government may enforce laws through civil or criminal action. Such action may be
resolved through a trial, a permanent injunction, a civil settlement, or a guilty plea.

In addition to those individuals and entities with findings of guilt, there
were also federal fraud-related charges pending against at least 599
other individuals or entities involving federal COVID-19 relief programs as
of June 30, 2023.17 The number of individuals or entities facing fraud-
related charges related to COVID-19 relief programs has grown since
March 2020 and will likely continue to increase, as these cases take time
to develop. For example, an individual charged in an indictment in 2022
may not receive a trial until 2023 and if found guilty, the sentencing may
occur in 2024 or later. As of August 2022, the statute of limitations has

17A charge is merely an allegation, and all defendants are presumed innocent until proven
guilty beyond a reasonable doubt in a court of law.
Hundreds of COVID-19
Fraud-Related Cases Are
Pending

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GAO-24-106353  COVID-19
been extended to 10 years to prosecute individuals who committed PPP
and COVID-19 EIDL-related fraud.
We identified examples of various fraud schemes through our analysis of
court documentation for adjudicated cases involving federal COVID-19
fraud-related charges. We found that the fraud scheme participants
ranged from individuals with co-conspirators to very large complex fraud
syndicates that include foreign nationals.
Fraud schemes are achieved through various mechanisms. A mechanism
is a process, technique, or system used by fraudsters to execute
fraudulent activities. Mechanisms include misrepresentation, cybercrime,
and document falsification. A mechanism can be an individual action or a
group of actions working in concert. These schemes result in financial
loss and impacts on taxpayers, agency reputation and integrity, federal
program goals, and other areas such as public health and safety.
Program managers can use the details of existing fraud schemes
identified in their programs—including information on the impact of these
schemes—to identify program vulnerabilities. Moreover, program
managers can leverage details on fraud schemes and their corresponding
impacts to evaluate and adapt fraud risk management activities in
alignment with leading practices outlined in GAO’s Fraud Risk
Framework.18 Three components in the Fraud Risk Framework include
the following leading practices related to using past schemes and related
information to help combat fraud:
•
The assess component directs program managers to consider the
financial and non-financial impacts of fraud risks and identify specific
tools, methods, and sources for gathering information about fraud
risks, including data on fraud schemes and trends from monitoring
and detection activities.
•
The design and implement component directs agencies to analyze
information on previously detected fraud and consider known or
previously encountered fraud schemes to design data analytics.
•
The evaluate and adapt component directs agencies to collect and
analyze data, including data from reporting mechanisms and
instances of detected fraud.

18GAO-15-593SP.
Fraud Schemes Illustrate
a Variety of Participants,
Mechanisms, and Impacts

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Table 2 provides examples of various fraud schemes affecting federal
COVID-19 relief programs. The examples include some of the
mechanisms used to carry out the fraud activity, as well as the
participants and impacts. Although the examples are categorized by a
particular mechanism, the same mechanisms may be present in other
fraud scheme examples as well. Also, the examples below do not reflect
all of the fraud schemes, mechanisms, or affected COVID-19 relief
programs.
Table 2: Examples of Fraud Schemes Affecting Federal COVID-19 Relief Programs
Key mechanism
Fraud scheme description

Conspiracy. Cases involve a secret
agreement by two or more individuals to
commit a crime.
Participants and affected program: Nearly 50 individuals are alleged to have engaged
in a complex scheme to defraud a federal child nutrition program. The ringleaders of the
scheme operated a non-profit organization that served as a program sponsor prior to the
pandemic. Other individuals—recruited by employees of the non-profit to participate in
the scheme—set up sham program delivery sites to fraudulently claim reimbursements
for meal delivery.
Fraud scheme: Employees of the non-profit recruited individuals to establish dozens of
shell companies to enroll as program delivery sites throughout the state in order to
fraudulently claim program reimbursements. The non-profit employees solicited and
received bribes and kickbacks from the sponsored delivery sites. Owners of the sham
delivery sites claimed to be serving meals to thousands of children a day within just days
or weeks of being formed. They created fictitious names and ages of children for their
enrollment applications, created and submitted false documentation such as fraudulent
meal count sheets, invoices, and attendance rosters, and used shell companies to
receive and launder program proceeds.
Impacts: As of June 30, 2023, four defendants have pleaded guilty to relevant charges
but have not yet been sentenced. The remaining individuals are still awaiting trial. In
exchange for sponsoring these sites’ fraudulent participation in the program, the non-
profit received more than $18 million in administrative fees to which it was not entitled. In
total, the non-profit organization claimed to have opened more than 250 sites throughout
the state of Minnesota and fraudulently obtained and disbursed more than $240 million in
program funds for their own financial benefit instead of using the funds as intended to
feed underserved children.
Participants and affected program: Two foreign nationals and suspected leaders of an
overseas-based transnational organized crime group fraudulently obtained
unemployment insurance (UI) benefits.
Fraud scheme: The two foreign nationals submitted multiple fraudulent applications to
receive UI benefits. They both fraudulently claimed to be U.S. citizens and provided fake
Social Security numbers. They used the illicit funds from unemployment benefits, along
with funds they received by pawning stolen goods, and laundered these funds through
wiring money to entities in another country. Their crimes included the robbery of $1.4
million in jewelry from residents of elderly communities.
Impacts: Together with their co-conspirators, the two foreign nationals received a total of
approximately $32,250 in UI benefits they were not eligible to receive. They both pleaded
guilty to conspiracy to launder monetary instruments, but have not been sentenced as of
June 30, 2023.

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GAO-24-106353  COVID-19
Key mechanism
Fraud scheme description

Misrepresentation. Cases involve a false
statement of a material fact made by one
party that affects another party’s decisions.
This includes other mechanisms such as
document manipulation, eligibility
misrepresentation, and false statements.
Participants and affected program: Two individuals owned and operated seven
companies engaged in a fraud scheme involving the Paycheck Protection Program (PPP)
and COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) program.
Fraud scheme: The individuals applied for 14 PPP loans for approximately $2 million
and 12 COVID-19 EIDL loans seeking approximately $3 million. In their applications they
submitted false documents, including fabricated tax documents, that inflated the number
of employees and corresponding payroll of their companies.
Impacts: The individuals received almost $650,000 in funds intended to help businesses
keep their workforce employed during the pandemic, but these funds were instead used
for personal gain, including the purchase of a $100,000 luxury car. Both individuals
pleaded guilty and were ordered to pay more than $800,000 in restitution. One defendant
was sentenced to more than 3 years in prison, while the other was sentenced to over 2
years in prison.
Participants and affected program: Two individuals engaged in PPP and COVID-19
EIDL fraud.
Fraud scheme: These individuals submitted applications claiming bogus employees.
They used residential addresses claiming they were farmers employing 15 total
employees with annual earnings over $1.2 million. In actuality they employed no one and
the farms did not exist.
Impacts: They obtained over $1 million in PPP and COVID-19 EIDL funds. This money
that was intended to help businesses keep their workforce employed during the
pandemic were instead used for personal gain. Collectively they were ordered to pay
over $218,000 in restitution. One individual was sentenced to 18 months in prison and
the other was sentenced to 30 months in prison.

Money laundering. Cases involve the
processing of criminal proceeds to disguise
their illegal origin (e.g., money mules).
Participants and affected program: A social media influencer engaged in PPP and
COVID-19 EIDL fraud.
Fraud scheme: The influencer applied for PPP and COVID-19 EIDL funds through
fraudulent documents he created, such as tax forms and bank statements. He deposited
fraudulently obtained funds into accounts he opened specifically for that purpose. He
then laundered the funds by engaging in several monetary transactions, including
purchasing and trading securities and cryptocurrency, settling personal debts and making
payments to his girlfriend.
Impacts: In total, the influencer fraudulently applied for and received $146,000 in PPP
funds and $284,000 in COVID-19 EIDL funds intended to help sustain businesses during
the pandemic. The influencer pleaded guilty to wire fraud, aggravated identity theft, and
money laundering involving PPP and COVID-19 EIDL. The individual has not been
sentenced as of June 30, 2023.
Participants and affected program: An owner of an internet clothing retailer defrauded
the Main Street Lending Program.
Fraud scheme: The individual claimed the funds requested would be used for working
capital and payroll only, but they but were not. Instead the individual transferred amounts
from the company account to her personal account and used the funds to pay for
construction on her home and a down payment for a personal vehicle.
Impacts: She received $424,168 from the Main Street Lending Program. Funds set
aside to help small businesses remain operational were instead used for her personal
gain. She pleaded guilty to bank fraud and wire fraud and has not been sentenced as of
June 30, 2023.

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GAO-24-106353  COVID-19
Key mechanism
Fraud scheme description

Conflict of interest. Cases involve an
individual or a corporation (either private or
governmental) in a position to exploit their
own professional or official capacity in
some way.
Participants and affected program: An individual who worked for the U.S. Postal
Service committed fraud involving Treasury’s economic impact payments (EIP).
Fraud scheme: The individual stole credit cards and blank checkbooks from the mail at
the post office where she was employed as a clerk, and provided them to her co-
conspirators in exchange for cash. She worked with her co-conspirators to create
counterfeit EIP checks to deposit in accounts of solicited accountholders for them to later
withdraw for cash. She also filed false and fraudulent COVID-19 EIDL applications for
fake businesses that did not exist, but those applications were not approved by the Small
Business Administration (SBA).
Impacts: Along with her co-conspirators, they deposited or attempted to deposit
thousands of dollars of counterfeit EIP checks. She pleaded guilty to conspiracy to
commit bank fraud and false statements to the SBA and was sentenced to 3 years in
prison and ordered to pay more than $60,000 in restitution.
Participants and affected program: An individual was a lead claims examiner at a
state’s UI agency and engaged in UI benefit fraud.
Fraud scheme: This individual worked with outside co-conspirators to use his network
credentials to override “fraud stops” on UI claims that the state’s system had identified as
potentially fraudulent. Some of these claims were made in the name of people who did
not exist.
Impacts: In total, his actions resulted in the fraudulent disbursement of over $1.1 million
of federal and state UI funds, with an additional attempt to override another $761,000 in
funds that was prevented. He pleaded guilty to conspiracy to commit wire fraud and was
sentenced to 24 months in prison and approximately $1 million in restitution.

Theft. Cases involve the act of stealing,
such as monetary theft and personally
identifiable information theft.
Participants and affected program: Three individuals engaged in UI benefit fraud.
Fraud scheme: The group used information stolen from prison inmates to file
approximately 50 applications for UI benefits. An incarcerated cousin of one of the
individuals provided the inmate information. These funds were transferred to electronic
benefits transfer debit cards accounts held in the names of persons, including prison
inmates, who were not entitled to receive UI benefits.a
Impacts: In total, the group fraudulently received around $1.2 million in UI benefits.
Given the amount the group was able to obtain from the program and the fact that the
fraud ring used state prisoners to accomplish their scheme, the state may suffer
reputational damage. The group all pleaded guilty to fraud in connection with emergency
benefits and wire fraud. The longest sentence one individual in the group received was
for almost 2 years in prison. This individual was also ordered to pay more than $450,000
in restitution.
Participants and affected program: Two college students engaged in fraud involving
the Higher Education Emergency Relief Fund (HEERF).
Fraud scheme: The two students used stolen personally identifiable information,
specifically nine individual’s student identification numbers and passwords, to access
their school’s online student portal to apply for emergency financial aid from HEERF.
Impacts: One of the students fraudulently obtained $800 in HEERF funds while the other
student obtained $400 in HEERF funds. In total nine individuals were affected by the
identity theft scheme, which can result in them having to take steps to address the fraud
committed in their name. Both students pleaded guilty to theft of government money
under $1,000 and were sentenced to 1 year of probation and ordered to pay $5,600 in
restitution.
Source: GAO Antifraud Resource and analysis of court documentation; Icons-Studio/stock.adobe.com (icons). | GAO-24-106353
Note: Although the examples are categorized by a particular mechanism, the same mechanisms may
be present in other fraud scheme examples as well.

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aElectronic benefits transfer is a system similar to a debit card that allows recipients of government
assistance to pay directly for purchases.

Fraud involving consumer scams. In addition to fraud against federal
relief programs, COVID-19 related fraud can result in financial losses to
consumers and undermine health and safety. Fraud involving consumer
scams are cases that involve deceptive business practices that may
cause consumers (individuals or businesses) to suffer financial or other
losses. At least 37 individuals or entities facing federal fraud-related
charges involving consumer scams related to COVID-19 have pleaded
guilty and three individuals or entities received a guilty verdict at trial,
according to DOJ public information and court information from March
2020 through June 2023.19
Table 3 provides examples of various fraud schemes involving consumer
scams related to COVID-19. The examples include some of the
mechanisms used to carry out the fraud activity, as well as the
participants and impacts. Although the examples are categorized by a
particular mechanism, the same mechanism may be present in other
fraud scheme examples as well. Mechanisms reflect how fraud activities
are carried out and are therefore present across many different types of
schemes.
Table 3: Examples of Schemes Involving Consumer Scams Related to COVID-19
Key mechanism
Fraud scheme description

Health care fraud. Cases that involve an
individual, a group of people, or a company
knowingly misrepresenting or misstating
something about the type, the scope, or the
nature of the medical treatment or service
provided, in a manner that could result in
unauthorized payments being made.
Participants: A licensed medical practitioner engaged in a health care fraud
scheme related to the COVID-19 pandemic.
Fraud scheme: The practitioner used the COVID-19 pandemic as an opportunity to
sell products known as homeopathic immunizations, falsely claiming they would
provide lifelong immunity to COVID-19. She provided customers purchasing these
products vaccine record cards to make it appear that they received government-
approved vaccines.
Impacts: She received $74,483 in payments for the provision of fabricated COVID-
19 vaccination record cards. She provided the false documents knowing that the
vaccine record cards would be used to mislead school officials enforcing the state’s
vaccination laws, creating health and safety risks for customers and the public at
large. She pleaded guilty to wire fraud and false statement, and was sentenced to
almost 3 years in prison.

19There were also federal charges pending against at least 40 other individuals or entities
related to consumer scams as of June 30, 2023.
Numerous Prosecutions
Have Targeted COVID-19
Fraud-Related Cases
Involving Consumer
Scams and Other Types of
Fraud

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GAO-24-106353  COVID-19
Key mechanism
Fraud scheme description

Embezzlement. Cases involve the unlawful
misappropriation or misapplication by an
offender to his or her own use or purpose of
money, property, or some other thing of value
entrusted to his or her care, custody, or control.
Participants: An office manager engaged in fraud involving the Paycheck
Protection Program (PPP).
Fraud scheme: The office manager and her husband devised a scheme to defraud
the company she was employed by. The company appropriately received a PPP
loan. However, the office manager used her access to the company’s bank accounts
and credit cards to make transfers of more than $43,000 from the loan to pay
personal bills or to bank accounts she and her husband controlled.
Impacts: The office manager’s actions took federal funds from the company so it
could not use those funds for their intended purpose. The office manager pleaded
guilty to wire fraud, and was sentenced to 4 years in prison and ordered to pay
approximately $587,000 in restitution.

Mislabeling. Cases involve mislabeling
products.

Participants: A business owner mislabeled products related to the COVID-19
pandemic.
Fraud scheme: A company and its business owner unlawfully imported, sold, and
mailed unregistered pesticide product marketed as a killer of airborne viruses such
as COVID-19. The product was falsely described as an air purifier rather than a
pesticide. The company shipped products to individuals who purchased from their
website via U.S. mail. The product contained sodium chlorite, which is an item
declared to be unmailable under U.S. postal rules and regulations because of its
propensity to cause a fire or explosion.
Impacts: The company and its business owner were ordered to jointly pay
restitution of $86,754 and forfeit $427,689 in proceeds. In addition, the company
agreed to pay a fine of $42,000, for a total financial penalty of $556,443. The
company sold this mislabeled product to customers purchasing it with the hopes of
killing the COVID-19 virus, creating potential health and safety risks for customers
and the public at large. The business owner pleaded guilty to the entry of goods
falsely classified and was sentenced to 8 months in prison.

Smuggling. Cases involve exporting or
importing something in violation of customs
laws.

Participants: An individual engaged in smuggling mislabeled products to treat
COVID-19.
Fraud scheme: The smuggler imported chloroquine from a manufacturer overseas
with the intent to divide it into gel capsules and distribute it to others for preventing
and treating COVID-19. He was not a licensed medical provider or pharmacist and
has no medical background or training.
Impacts: The smuggler caused the package in which the chloroquine was shipped
to be mislabeled and undervalued to evade detection at the U.S. border creating
potential health and safety risks for customers and the public at large. He pleaded
guilty to a violation of the Federal Food, Drug and Cosmetics Act, and was
sentenced to 2 years of probation and ordered to pay a $1,000 fine.
Source: GAO Antifraud Resource and analysis of court documentation; Icons-Studio/stock.adobe.com (icons). | GAO-24-106353
Note: Although the examples are categorized by a particular mechanism, the same mechanisms may
be present in other fraud scheme examples as well.

Other fraud cases. In addition, we identified other types of COVID-19
fraud-related cases that either involve a federal program that is not a
COVID-19 relief program or involve a COVID-19 related issue other than
consumer scams. Eighty-one individuals or entities pleaded guilty to
federal charges related to these other federal cases and five individuals
or entities received a guilty verdict at trial according to DOJ public

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GAO-24-106353  COVID-19
information and court information we reviewed from March 2020 through
June 2023.20
Table 4 provides examples of fraud schemes involving COVID-19 fraud in
a federal program that is not a COVID-19 relief program or involves a
COVID-19 related issue other than consumer scams. The examples
include some of the mechanisms used to carry out the fraud activity, as
well as the participants and impact of fraud. Although the examples are
categorized by a particular mechanism, the same mechanisms may be
present in other fraud scheme examples as well.

20In addition to the individuals or entities who pleaded guilty to these other types of federal
charges that were related to COVID-19 fraud, there were also federal charges pending
against at least 27 other individuals or entities as of June 30, 2023

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GAO-24-106353  COVID-19
Table 4: Examples of Other Fraud Schemes Related to COVID-19
Key mechanism
Fraud scheme description

Medical self-referral. Cases whereby a
physician unlawfully refers certain designated
health services payable by Medicare to an
entity with which the physician or an immediate
family member has a financial relationship
(ownership, investment, or compensation),
unless an exception applies.
Participants: Three individuals were involved in a fraud scheme to commit Medicare
fraud that included purported COVID-19 testing.
Fraud scheme: Two of the individuals solicited, received, and concealed kickbacks
and bribes from a third conspirator who owned a company that purportedly provided
genetic and COVID-19 testing and other laboratory testing services. The company
owner billed Medicare for various purported services, without regard to whether the
patients needed any tests or were eligible for Medicare reimbursement. The
company owner also paid over $190,000 to the co-conspirators in kickbacks for the
referrals.
Impacts: Medicare paid more than $800,000 based on the fraudulent claims
submitted. By stealing from federal health care programs, this scheme victimized
beneficiaries and violated the public’s trust during a national emergency. The two co-
conspirators pleaded guilty to conspiring with a clinical laboratory to commit
Medicare fraud, and wire fraud. The company owner who paid kickbacks and bribes
received the longest sentence of more than 6 years in prison and was ordered to pay
almost $3 million in restitution.

Spoofing. Case that uses deliberately falsified
contact information (phone number, email, and
website) to mislead and appear to be from a
legitimate source.

Participants: A foreign national was involved in a spoofing scam to obtain COVID-
19 related medical equipment.
Fraud scheme: During the COVID-19 pandemic, the foreign national impersonated
procurement officials of eight U.S. states and local governments and three
educational institutions to fraudulently obtain medical equipment, such as
defibrillators. He used a web hosting company to spoof state procurement email
addresses and sought quotes for medical, laboratory, and computer equipment from
targeted suppliers. The targeted suppliers were known to do business with the
entities the foreign national was impersonating. The foreign national used the
payment terms of “net 30 days”, which is a standard term for government and
educational entities that requires payment for the goods within 30 days of delivery.
He exploited this industry standard to fraudulently obtain equipment without providing
any advance payment information or deposit prior to delivery of the equipment.
Impacts: Through this impersonation, the foreign national obtained and attempted to
obtain millions of dollars of medical equipment, laboratory products, computer
equipment and hardware, and other merchandise. This type of medical equipment,
like defibrillators, were in dire need during the COVID-19 pandemic because the high
demand and stress on supply chains caused shortages and reduced accessibility to
life-saving equipment. The foreign national pleaded guilty to wire fraud and was
sentenced to more than 4 years in prison and ordered to pay more than $300,000 in
restitution.
Source: GAO Antifraud Resource and analysis of court documentation; Icons-Studio/stock.adobe.com (icons). | GAO-24-106353
Note: Although the examples are categorized by a particular mechanism, the same mechanisms may
be present in other fraud scheme examples as well.

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GAO-24-106353  COVID-19

The Pandemic Response Accountability Committee (PRAC) was created
to help ensure pandemic response spending was administered efficiently
and effectively, and COVID-19 relief and recovery funds were awarded
appropriately.21 The PRAC is composed of 21 federal inspectors general.
To carry out its mission and address the subsequent fraud occurring in
these programs, the PRAC has several ongoing reporting efforts and has
developed data analytics tools to detect potential fraud.
Oversight and lessons learned reporting. The PRAC has issued six
semiannual reports to Congress about the status of its work. The most
recent report, released in June 2023, included updates on investigations,
reports, and alerts that focus on fraud, waste, and abuse in the use of the
federal pandemic funds.22 Specifically, the report outlined information on
the PRAC’s initiatives related to holding wrongdoers accountable through
the Fraud Task Force and mitigating major risks that cut across program
boundaries through their data analytics efforts.
The PRAC also issued an updated lessons learned report in June 2022 to
help identify changes to make pandemic spending more effective.23 This
work highlighted the major lessons the PRAC and its state partners have
found in their oversight of pandemic relief and recovery programs. The
report identifies 10 key areas for agencies to focus on. The areas related
to mitigating fraud are: validating self-certifying information before

21The PRAC was established by the CARES Act to conduct oversight of the federal
government’s pandemic response and recovery effort.
22Pandemic Response Accountability Committee, Semiannual Report to Congress,
October 1, 2022 - March 31, 2023 (Washington, D.C.: June 6, 2023).
23Pandemic Response Accountability Committee, Lessons Learned in Oversight of
Pandemic Relief Funds (Washington, D.C.: June 8, 2022).
Pandemic Oversight
Entity, Interagency
Task Forces, and
Federal Resources
Have Been
Established to
Combat COVID-19
Fraud
The Pandemic Response
Accountability
Committee’s Ongoing
Efforts to Address COVID-
19 Fraud

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GAO-24-106353  COVID-19
payments are sent, using existing federal data sources to determine
benefits eligibility, ensuring watchdogs have access to data to find fraud,
improving agency collaboration to oversee pandemic relief programs, and
accurate reporting to track pandemic relief spending.
Pandemic Analytics Center of Excellence. The PRAC created the
Pandemic Analytics Center of Excellence (PACE), which helps agencies
find the highest risk areas to investigate by combining oversight data in
one place with a suite of analytic tools, with the purpose to be shared and
used to find fraud. According to the PRAC, the PACE promotes best
practices, provides services to OIGs who lack data analytics capabilities,
provides leading edge tools and training to OIG professionals, and
promotes overall data literacy throughout the oversight community. As of
June 2023, the PRAC reported that the PACE has supported over 500
investigations into more than 6,000 subjects, with an estimated potential
fraud loss of $500 million.24
However, the PACE is focused on pandemic programs only and the
funding for the PACE is currently set to expire in 2025. Ongoing
challenges with fraud and improper payments highlight the value of these
analytical capabilities, not only for emergency spending but to tackle
these challenges across the federal government where they have been a
growing concern in recent years.
In March 2022, we recommended that Congress consider establishing a
permanent analytics center of excellence to aid the oversight community
in identifying improper payments and fraud.25 Without permanent
government-wide analytics capabilities to assist the oversight community,
some OIGs will have limited resources to apply to nonemergency
programs to ensure robust financial stewardship. Additionally, the OIG
community will lack a comprehensive tool with the power to bring together
information from across the whole of government to better prepare for
applying fundamental financial and fraud risk management practices to
future emergency funding. The status for this matter remains open and
not addressed.

24Pandemic Response Accountability Committee, How the PRAC Fights Fraud
(Washington, D.C.: Aug. 23, 2023).
25GAO-22-105715.

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DOJ and the PRAC have developed several interagency task forces to
address and combat COVID-19 fraud. The examples of federal efforts
presented in this report illustrate the different types of government-wide
efforts undertaken since the beginning of the pandemic, and are not
exhaustive of all federal efforts to address COVID-19 fraud.
COVID-19 Fraud Enforcement Task Force. DOJ established the
COVID-19 Fraud Enforcement Task Force in May 2021 to investigate and
prosecute individuals and organizations involved in COVID-19 related
fraud. The task force includes representatives from various federal
agencies, including the Federal Bureau of Investigation (FBI) and the
Department of Health and Human Services (HHS). According to DOJ, the
goal of the COVID-19 Fraud Enforcement Task Force is to bolster efforts
to investigate and prosecute the most culpable domestic and international
criminal actors and assist agencies with administering relief programs to
prevent fraud. DOJ also notes that the task force does so by augmenting
and incorporating existing coordination mechanisms, identifying
resources and techniques to uncover fraudulent actors and their
schemes, and sharing and harnessing information and insights gained
from prior enforcement efforts.
The COVID-19 Fraud Enforcement Task Force has investigated several
large cases, including those with complex schemes defrauding COVID-19
relief programs. For example, in August 2023 the COVID-19 Fraud
Enforcement Task Force announced a 3-month cross-country fraud
enforcement sweep conducted in collaboration with other teams and
offices within DOJ. As part of this effort, the COVID-19 Fraud
Enforcement Task Force reported taking law enforcement actions against
fraudsters responsible for approximately $836 million in fraud. According
to a DOJ press release, this included filing criminal charges against 371
defendants. It also included 119 defendants pleading guilty or being
convicted at trial with over $57 million in court-ordered restitution
imposed. In addition to these actions, there were 117 civil actions with
over $10.4 million in judgments. DOJ and law enforcement secured over
$231.4 million in criminal and civil forfeiture. These enforcement actions
targeted a wide range of criminal activity–from violent criminals to
transnational crime groups to fraud on the Internal Revenue Service
(IRS)–and illustrate a collective federal commitment to combat COVID-19
related fraud.
National Unemployment Insurance Fraud Task Force. DOJ
established the National Unemployment Insurance Fraud Task Force
(NUIFTF) in response to the unprecedented scope of UI fraud during the
Interagency Task Forces
Aimed at Combatting
COVID-19 Fraud

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GAO-24-106353  COVID-19
COVID-19 pandemic. Specifically, it was established to investigate
numerous fraud schemes targeting state workforce agency UI programs
across the country. The NUIFTF is a prosecutor-led multi-agency task
force with representatives from the FBI, DOL OIG, IRS-Criminal
Investigation, Homeland Security Investigations, Social Security
Administration OIG, and other agencies. In addition to fraud
investigations, the NUIFTF has also released public warnings, such as
one in March 2021 highlighting that criminals are creating websites
mimicking unemployment benefit websites—including state workforce
agency websites—to steal personal information and file for UI benefits
during the COVID-19 pandemic.
PRAC Fraud Task Force. The PRAC and its OIG partners launched the
PRAC Fraud Task Force in January 2021 to help law enforcement pursue
investigations and criminal enforcement related to pandemic relief fraud.
The PRAC Fraud Task Force coordinates investigations, exchanges
information about fraud schemes, and shares resources that support
investigations across the federal government. The PRAC reported that
the work of the task force has resulted in hundreds of criminal
convictions, jail sentences, and the recovery of more than $1 billion.
Identity Fraud Reduction & Redress Working Group. The PRAC
formed the Identity Fraud Reduction & Redress (IFFR) Working Group in
July 2021 to prevent and address identity fraud in COVID-19 pandemic
response programs. According to the PRAC, the IFFR focused on
effective identity verification and victim identification, and related fraud
reduction and fraud assistance. The IFFR is a joint effort of multiple OIGs
from the National Reconnaissance Office, SBA, Treasury Inspector
General for Tax Administration, Department of Veterans Affairs, HHS,
and DOL. In June 2022, the IFFR released its first report summarizing
various OIG partners’ work to identify agency actions to reduce fraud and
help victims.26 Specifically, in the report, the IFFR Working Group noted
that sharing relevant identity verification data and providing timely

26Pandemic Response Accountability Committee, Key Insights: Identity Fraud Reduction
and Redress in Pandemic Response Programs (June 13, 2022). The report outlined the
following insights on potential improvements to reduce identity fraud in pandemic
response programs: conduct data matching and data linking to verify identity and eligibility
for government programs, establish controls or processes that check for duplicate
applications or benefits, collaborate and coordinate with states and other entities affiliated
with government benefit programs, develop processes to track and analyze fraud
complaints to uncover patterns or trends, strengthen communication surrounding
breaches, and find opportunities to rely on more robust forms or methods of identification.

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GAO-24-106353  COVID-19
assistance to identity fraud victims as impactful ways to help the victims
of identity fraud recover.
Federal agencies have developed fraud-related resources for
government, individuals, and businesses. Agencies have used hotline
portals; provided resources on COVID-19 related fraud online; and have
sent out warning letters and issued reports to support other agencies,
businesses, and individuals. Congress has also passed additional laws to
address COVID-19 pandemic-related fraud.
Agency hotlines. Existing hotline portals maintained by the Federal
Trade Commission (FTC), DOJ (National Center for Disaster Fraud),
GAO (FraudNet), and agency OIGs and a new hotline portal created by
the PRAC are available for anyone to file a complaint on known or
suspected fraud, waste, abuse, mismanagement, or violations of laws
and regulations involving funds or programs covered within the CARES
Act. Allegations are typically forwarded to the appropriate OIG or agency
as well as other federal, state, and local oversight entities.
From March 2020 through June 2023, our hotline—known as FraudNet—
received about 4,128 complaints related to the CARES Act, about 2,605
of which involve SBA’s PPP and COVID-19 EIDL program, DOL’s UI
programs, and Treasury’s and IRS’ economic impact payments (EIP).27
Additionally, as of June 6, 2023, the FTC has received 910,323 overall
COVID-19 reports, about 417,224 of which were related to fraud. The
FTC also reported that fraud loss totaled $1.1 billion.
Online fraud-related resources and reports. The FTC has developed
COVID-19 fraud prevention resources on its website. This includes

27The remainder of the complaints relate to a variety of other programs and issues,
including other federal COVID-19 relief programs such as the Restaurant Revitalization
Fund Grant program and Higher Education Emergency Relief fund; COVID-19 related
mortgage fraud; grants; and testing and vaccines. While not all of the complaints received
involve allegations of potential fraud, many of them do.
COVID-19 Fraud-Related
Resources Developed for
Government, Businesses,
and Individuals

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GAO-24-106353  COVID-19
information on how to identity and report COVID-19 related scams and
tips on how to protect personal and financial information.28
Individual agency OIGs have issued reports on findings, actions, and
recommendations related to fraud during the COVID-19 pandemic. For
example, in October 2020 the DOL OIG released a report that provided
information from an audit on the actions taken by DOL’s Employment and
Training Administration and state workforce agencies to deter and detect
fraud relating to the self-certification process of one of the temporary UI
programs, the Pandemic Unemployment Assistance program.29 As
another example, in September 2022 the SBA OIG released a report that
evaluated SBA’s controls to flag or prevent potentially fraudulent COVID-
19 EIDL applications submitted from foreign Internet Protocol addresses,
of which the agency processed more than 233,000 applications and
disbursed 41,638 COVID-19 EIDL loans for $1.3 billion.30
Warning letters. FTC sends warning letters, sometimes jointly with the
Food and Drug Administration, to companies allegedly selling unapproved
products that may violate federal law by making deceptive or scientifically
unsupported claims about their ability to treat or cure COVID-19. The
purpose of FTC letters is to warn companies that their conduct is likely
unlawful and that they can face serious legal consequences, such as a
federal lawsuit, if they do not immediately stop. FTC’s website stated that
companies that receive warning letters typically take steps to come into
compliance with the law and have found the warning letters are a rapid
and effective means to address the problem. From March 2020 through
June 2023, FTC has sent 536 warning letters to companies.

28Examples of online COVID-19 fraud-related resources created by federal agencies
include: DOJ, Coronavirus Response, accessed Sept. 6, 2023,
https://www.justice.gov/coronavirus; FTC, Coronavirus (COVID-19) Pandemic: The FTC in
Action, accessed Sept. 6, 2023, https://www.ftc.gov/news-events/features/coronavirus;
PRAC, General & Fraud FAQs, accessed on Sept. 6, 2023,
https://www.pandemicoversight.gov/faq-resources/general-and-fraud; SBA, Preventing
fraud and identity theft, accessed Sept. 6, 2023,
https://www.sba.gov/funding-programs/loans/covid-19-relief-options/preventing-fraud-ident
ity-theft.
29DOL OIG-Office of Audit, COVID-19: States Cite Vulnerabilities in Detecting Fraud While
Complying with the CARES Act UI Program Self-Certification Requirement, 19-21-001-03-
315 (Washington, D.C.: Oct. 21, 2020).
30SBA OIG, COVID-19 Economic Injury Disaster Loan Applications Submitted from
Foreign IP Addresses, 22-17 (Washington, D.C.: Sept. 12, 2022).

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Legislative efforts, proposed legislation, and agency rules. In August
2022 the President signed into law two acts by Congress that extended
the statute of limitations for criminal and civil enforcement for all forms of
PPP and COVID-19 EIDL fraud from 5 years to 10 years.31 Enactment of
these laws allows investigators more time to pursue those who defrauded
programs intended to assist small business owners and their employees
during a national crisis. The new ten-year statute of limitations is now
consistent with the charge of bank fraud, which the PRAC notes has been
charged in most cases of alleged PPP fraud because most loans were
issued by traditional banks. For loans not issued by banks, however
cases could only be prosecuted as wire fraud, which has a statute of
limitations of 5 years. With the new laws in place, law enforcement will
now have an additional 5 years to pursue fraud charges in small business
relief programs, regardless of the type of lender.
In December 2020, Congress passed the COVID-19 Consumer
Protection Act of 2020. This Act made it unlawful for any person or
corporation to engage in a deceptive act or practice affecting the
treatment, cure, prevention, mitigation, or diagnosis of COVID-19 or a
government benefit related to COVID-19.32 People who violate this Act
may be subject to civil penalties, injunctive relief, and other remedies
available under the FTC Act. The COVID-19 Consumer Protection Act of
2020 provides additional enforcement authority for the FTC regarding
COVID-19 related claims and potentially deters deceptive COVID-19
related scams.
The FTC also published a notice of proposed rulemaking in October 2022
to fight government and business impersonation scams.33 The proposed
rule would prohibit the impersonation of government, businesses, or their

31PPP and Bank Fraud Harmonization Act of 2022, Pub. L. No. 117-166, 136 Stat. 1365
and COVID-19 EIDL Fraud Statute of Limitations Act of 2022, Pub. L. No. 117-165, 136
Stat. 1363.
32The COVID-19 Consumer Protection Act, which became law in December 2020 as part
of the Consolidated Appropriations Act, 2021, gives the FTC authority to seek civil
penalties on the first offense for scams and deceptive practices related to the COVID-19
pandemic. Pub. L. No. 116-260, div. FF, tit. XIV, § 1401, 134 Stat. 1182, 3275-3276
(2020).
33Notice of Proposed Rulemaking, Trade Regulation Rule on Impersonation of
Government and Businesses, 87 Fed. Reg. 62,741 (Oct. 17, 2022).

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GAO-24-106353  COVID-19
officials and allow the FTC to recover money from or seek civil penalties
against scammers who violate the rule and harm consumers.34
In March 2023, the Administration released a new anti-fraud proposal
consisting of 17 components intended to enhance the response to fraud
against COVID-19 relief programs and apply lessons learned during the
pandemic to prevent fraud. The plan includes administrative policy
changes, proposals for new legislation, and a total of $1.6 billion in
potential new funding. The actions in the proposal are divided into three
broader categories—(1) support for fraud investigations and prosecutions,
(2) fraud and identity theft prevention, and (3) help for identity theft
victims. Additionally, this proposal calls upon the Congress to also
increase the statute of limitations for fraud involving pandemic UI
programs to 10 years.
We are sending copies of this report to the appropriate congressional
committees. We are also sending informational copies to DOJ, OMB, the
PRAC, and the Council of the Inspectors General on Integrity and
Efficiency. In addition, the report is available at no charge on the GAO
website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact
me at (202) 512-6722 or SheaR@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made key contributions to this report
are listed in appendix I.

Rebecca Shea
Director, Forensic Audits and Investigative Service

34The FTC noted that fraud reports of these impersonation scams rose during the COVID-
19 pandemic, and it received more than 2.5 million reports from consumers nationwide
from the beginning of 2017 through the middle of 2022, and those consumers reported
losing more than $2 billion to these scams.

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GAO-24-106353  COVID-19
List of Committees
The Honorable Patty Murray
Chair
Susan Collins
Vice Chair
Committee on Appropriations
United States Senate
The Honorable Ron Wyden
Chairman
The Honorable Mike Crapo
Ranking Member
Committee on Finance
United States Senate
The Honorable Bernie Sanders
Chairman
The Honorable Bill Cassidy, M.D.
Ranking Member
Committee on Health, Education, Labor, and Pensions
United States Senate
The Honorable Gary C. Peters
Chairman
The Honorable Rand Paul, M.D.
Ranking Member
Committee on Homeland Security and Governmental Affairs
United States Senate
The Honorable Kay Granger
Chairwoman
The Honorable Rosa L. DeLauro
Ranking Member
Committee on Appropriations
House of Representatives
The Honorable Cathy McMorris Rodgers
Chair
The Honorable Frank Pallone, Jr.
Ranking Member
Committee on Energy and Commerce
House of Representatives

Page 33
GAO-24-106353  COVID-19
The Honorable Mark E. Green, M.D.
Chairman
The Honorable Bennie G. Thompson
Ranking Member
Committee on Homeland Security
House of Representatives
The Honorable James Comer
Chairman
The Honorable Jamie Raskin
Ranking Member
Committee on Oversight and Accountability
House of Representatives
The Honorable Jason Smith
Chairman
The Honorable Richard Neal
Ranking Member
Committee on Ways and Means
House of Representatives

Appendix I: GAO Contact and Staff
Acknowledgments

Page 34
GAO-24-106353  COVID-19
Rebecca Shea at (202) 512-6722 or SheaR@gao.gov
In addition to the contact name above, Gabrielle Fagan (Assistant
Director), Scott Clayton (Analyst-in-Charge), Carla Craddock, and Krinjal
Mathur made key contributions to this report. Also contributing to the
report were Colin Fallon, Amber Gray, Brooke Linsenbardt, Maria
McMullen, Daniel Silva, and Sabrina Streagle.

Appendix I: GAO Contact and Staff
Acknowledgments
GAO Contact
Staff
Acknowledgments

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