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August 19, 2022

Prosecutors Battle Massive Pandemic Fraud

Federal prosecutors are having to wade through a deluge of fraud cases to get taxpayer money back.

During the COVID-19 pandemic, the federal government sent money to the American people using different pieces of legislation including the American Rescue Plan. This infusion of money into an economy that was put into an unnecessary coma was meant to avoid a long and painful recession. However, many people took advantage of the disorganized and unguarded free money from the government. Now the Department of Justice, the Department of Labor, and others have their hands full tracking down all the people who defrauded taxpayers. Some criminals took millions of dollars.

The scale of the fraudulent activity is massive. Federal prosecutors, the FBI, the Secret Service, the IRS, and even the Postal Service are sorting through the different fraud cases. The Justice Department has estimated that at least $6 billion of the relief money was defrauded, though The Washington Post reported that unemployment schemes may have allowed for up to $163 billion to be stolen.

According to The New York Times, “The federal government has already charged 1,500 people with defrauding pandemic-aid programs, and more than 450 people have been convicted so far.” There are so many fraud cases involving small business loans that investigators aren’t even going after people who stole “paltry” sums like $10,000. The Times article goes on to describe some of the criminals who were not subtle and incredibly greedy in their fraudulent schemes. What it neglects to cover is the insane amount of government workers who also took advantage of the pandemic cash flow.

People working in their state’s unemployment department stole identities and filed for unemployment assistance; Social Security workers got approved for government benefits using a similar trick; postal workers stole stimulus checks; and city workers charged for pandemic-related jobs they didn’t actually do.

On August 5, President Joe Biden sent a message to these fraudsters: “My message to those cheats out there is this: You can’t hide. We’re going to find you.” That same day, he signed a bill designed to help the federal government prosecute these crimes.

The president is joined by Pandemic Response Accountability Chairman Michael Horowitz, who said: “You can’t have a system where crime pays. It undercuts the entire system of justice. It undercuts people’s faith in these programs, in their government. You can’t have that.”

That is true, of course. If only that vision of justice and social order was carried out across the country, where violent criminals are allowed to go free thanks to district attorneys like George Gascon. Some lawyers for the pandemic-aid fraudsters are using that tact in their clients’ defense.

In the case of Richard Ayvazyan, his lawyer said that the government was asking for it by handing out money without safeguards in place. The government, he explained, was “handing out money with no checks, and a lot of people took advantage of that. It’s a honey trap. Richard Ayvazyan fell into that trap.”

This line of reasoning — which would likely have gotten Ayvazyan off with a Soros-backed DA — did not dissuade the judge from sentencing him to 17 years in prison. Ayvazyan chose to steal from the government; that’s on him. There is, however, a kernel of truth to the government making theft easy.

It’ll take years to sort out this mess. The hard truth is that the federal government should have had stricter guidelines for the dispersement of money. It shouldn’t have relied on the honor system. As British screenwriter Troy Kennedy Martin once said: “I trust everyone. I just don’t trust the devil inside them.”

Had the government simply taken a less trusting approach, many of these criminals would have been prevented from stealing money. It’s government inefficiency at its most galling. Now Big Brother has to spend thousands of man hours sorting through the mess it created. The very intention of dispersing that money was to prevent inflation. How’d that work out?

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