Thursday, April 18

New Covid fraud prosecutor steps up effort to convict people who stole billions in relief benefits

The federal government’s new top prosecutor for serious fraud against the massive pandemic relief program is setting up teams to analyze what he has called “an almost shocking amount of data” that could bring new charges.

Kevin Chambers, who was serving as associate deputy attorney general, was named chief prosecutor for Covid-19 fraud on Thursday by the Justice Department. President Joe Biden said in his State of the Union address that the prosecutor would lead the charge against major perpetrators of pandemic fraud.

In an interview with NBC News, Chambers said his goal is to prosecute those who illegally obtained money from pandemic relief benefits including the Paycheck Protection Program and unemployment insurance funds to discourage such behavior in the future and try to get as much money back as possible.

“People bought vacation homes, Bentleys, and Rolexes. We may not get all the money back, but that’s not the only value in bringing these cases,” he continued.

Although many of the programs ended last year, he said prosecutors are a long way from finishing their work, adding that “if folks who have stolen from the program think for a second that our work is done or they’ve gotten away with it, they’ve got another thing coming.”

Chambers said his role is to enhance the work the Justice Department has already done. Federal prosecutors have so far brought more than 1,000 criminal cases related to fraud losses of over $1 billion, he said, and civil cases have been filed against 1,800 individuals or entities related to over $6 billion in loans.

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Last fall, a federal judge sentenced a California man, Richard Ayvazyan, to 17 years in prison for leading a fraud ring that stole $18 million in Covid-19 relief loans intended for small businesses — a scheme the judge called “horrific, calculated and callous .”

FBI agents said when they raided his home, his wife tossed a bag containing more than $450,000 into the bushes in their back yard. She was sentenced to six years in prison. Both cut off their electronic monitoring bracelets and went on the run, prosecutors said. They were sentenced in absentia.

Just last month, 11 members and associates of a Brooklyn gang were charged with stealing the identities of 800 people to claim more than $4 million in unemployment benefits. Court documents showed pictures of some of them posing while holding piles of cash.

Chambers said he plans to set up strike forces, consisting of analysts, agents, and prosecutors, to sort through huge amounts of data supplied by state unemployment offices. “The data that we are still collecting from the states is the key to so much of the evidence of fraud,” he said.

It’s an enormous task. The Secret Service has estimated that $100 billion was illegally obtained from the Covid relief programs, but private experts who have studied the issue say it could range as high as $400 billion.

The US government spent $5 trillion to fight the Covid-19 aid, Chambers said, “so the numbers are going to be big.”

Chambers is an experienced federal prosecutor. He has also worked for private law firms and as a certified public accountant, a background that he said “might give a little edge in the current job.”

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A son of Jamaican immigrants, his father worked at the Jamaican Mission to the UN and decided to remain in the US to raise a family. His mother was a registered nurse.

In explaining the importance of prosecuting Covid-19 fraud cases, Chambers rejected the notion that stealing from the government is a victimless crime. “In a very real sense, people were hurt. Because of this fraud, there are people who didn’t get the loans that might have paid for their kids’ tuition for another year,” he said.

“This was not an endless amount of money. If a person gets it through fraud, that is money that would have gone to someone who needed it, was entitled to it, but didn’t get it.”

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