United States Attorney Andrew E. Lelling recently announced that the U.S. Attorney’s Office (USAO) for the District of Massachusetts entered into a Memorandum of Understanding (MOU) with Special Inspector General Brian D. Miller of the Office of the Special Inspector General for Pandemic Recovery (SIGPR) to investigate and prosecute fraud in the distribution of the funds authorized by the Coronavirus Aid, Relief, and Economic Security (CARES Act).
According to the press release, the MOU outlines the four following objectives:
- Provide a coordinated response to CARES Act funding fraud, with an emphasis on organized criminal activity, as well as criminal and civil fraud affecting federal money, vulnerable victims, and fraud recidivists;
- Speed up legal process, case intake, and prosecution of CARES Act-related fraud;
- Link and associate isolated CARES Act-related complaints with larger schemes and related unlawful activity; and
- Deter future CARES Act funding fraud by increasing awareness of successful criminal prosecutions and civil enforcement actions against individuals and companies involved in CARES-related financial fraud.
This announcement is further evidence that the federal government is prioritizing the investigation and prosecution of matters involving loans and other monies received through COVID-19 relief programs. The alliance between the Massachusetts USAO and the SIGPR is significant for at least two additional reasons.
First, the Boston office of the Massachusetts USAO (Boston Office) is known for its proactive pursuit of fraud against the federal government. As discussed in a prior post, the Boston Office has a history of initiating high-profile health care fraud investigations without waiting for a relator to file a qui tam action. We expect to see a similar trend develop in the area of COVID-19 relief program fraud enforcement as well. In fact, the Boston Office already filed the first COVID-relief fraud case in Massachusetts alleging that an individual filed fraudulent loan applications seeking more than $13 million in forgivable Paycheck Protection Program loans.
Second, the MOU demonstrates that predicted interagency cooperation – which we discussed in a previous post – is already underway, which will undoubtedly lead to a heightened level of enforcement activity. In Tuesday’s press release, Special Inspector Brian D. Miller confirmed that “[i]dentifying fraud and preventing any waste or abuse of the money provided under the CARES Act is a top priority for both of our offices, and we are determined to bring those who attempt to steal from American taxpayers to justice.”
For more information regarding anticipated civil and criminal investigations related to the COVID-19 relief programs and strategies to prepare for potential enforcement, please access our webinar in which Mintz’s COVID-19 Compliance & Enforcement Defense Task Force reviews how to avoid risk and how to address enforcement when it arises.