Biden Asking for $1.6 Billion and More Time to Prosecute Pandemic Fraud, Recover Funds

Biden Asking for $1.6 Billion and More Time to Prosecute Pandemic Fraud, Recover Funds
President Joe Biden speaks during the annual House Democrats Issues Conference at the Hyatt Regency Hotel in Baltimore on March 1, 2023. (Drew Angerer/Getty Images)
Ryan Morgan

The Biden administration is seeking $1.6 billion in funding to help prosecutors track down and recover government funds that were fraudulently distributed under COVID-19 pandemic relief programs.

On a call with reporters on Thursday, White House American Rescue Plan coordinator Gene Sperling laid out a new plan by the Biden administration to prosecute pandemic fraud. The plan calls for Congress to extend prosecution deadlines and provide more funding for additional resources to pursue fraud cases. The plan also calls for establishing new safeguards against identity theft, which fraudsters have used to obtain funds set aside in pandemic relief programs.

The Biden administration intends for about $600 million of the total $1.6 billion to go toward forming at least 10 new Justice Department task forces to prosecute pandemic fraud, in addition to the three that already exist.

In his call with reporters, Sperling argued the money the Biden administration is requesting could result in the recovery of an even greater sum of money.

“It’s just so clear and the evidence is so strong that a dollar smartly spent here will return to the taxpayers, or save, at least $10,” Sperling said.

After COVID-19 spread throughout the United States in 2020, state and federal public health officials encouraged a variety of measures to limit the spread of the virus, including self-isolating, limiting crowd sizes, limiting personal travel, and even closing down “non-essential” businesses. As a result of these measures, many businesses closed down and unemployment jumped.

As the pandemic-era closures led to these job losses and business closures, lawmakers passed several different pandemic-era spending programs to provide direct economic relief to Americans. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, and American Rescue Plan Act together account for about $7.1 trillion in pandemic-era economic stimulus efforts.

“On the whole, those programs did enormous good,” Sperling said. “There were also cases where guardrails were unnecessarily lowered, which led to unnecessary and massive fraud.”

More Time to Prosecute Fraudsters

In addition to requesting more money for investigators and prosecutors, the Biden administration plan also calls for extending the statute of limitations for prosecutions of this nature from about five years to 10 years.

Last month, government inspectors and accountability officers testified before Congress that they don’t believe they currently have enough time to investigate the full extent of the Unemployment Insurance (UI) fraud that occurred during the pandemic.

During a House Ways and Means Committee hearing, Department of Labor (DOL) Inspector General Larry Turner testified (pdf) that he expects his department to be busy investigating pandemic-related fraud through at least September 2026 “when the statute of limitations for most pandemic-related violations will have expired.”
“Extending the statute of limitations for fraud associated with pandemic-related UI programs will help ensure investigators and prosecutors have time to effectively pursue and hold accountable those groups and individuals that targeted and defrauded the program, and that they do not escape justice,” said Michael Horowitz, the Department of Justice Inspector General and chair of the Pandemic Response Accountability Committee (PRAC).
Congress has previously extended the statute of limitations for prosecuting other types of pandemic-era fraud, such as violations of the Paycheck Protection loan program and COVID-19 economic injury disaster loan programs. Those measures to extend the prosecution deadlines enjoyed broad bipartisan support.

In addition to requesting an extension on the statute of limitations, Horowitz called on Congress to raise the jurisdictional limit for administrative recoveries of “smaller” false or fraudulent claims from $150,000 to $1,000,000. Horowitz said PRAC is aware of at least a million pandemic awards, totaling about $362 billion, that ranged from $150,000 to $1,000,000.

As time has gone on, the estimate of fraudulent pandemic spending has increased. In his testimony before the House last month, Turner revised a DOL estimate of potentially fraudulent pandemic-era UI payments from $163 billion up to $191 billion.

The Associated Press contributed to this article.