The government has moved at a record pace to investigate fraud related to COVID-19 benefits, such as PPP fraud and use of fraudulent tax credits granted by the CARES Act. In a story broken by Frederic Lee at Tax Notes[1], IRS Special Agent in Charge, Ryan L. Korner, stated as follows during a virtual meeting of the California bar:
We’re working [COVID-19 fraud cases] very quickly. They’re very different than traditional tax cases that can take years. In many instances, we’re identifying perpetrators of these crimes, and within a week or a couple of days, we’re out there arresting them.
It is incredibly rare to see IRS criminal investigations conclude this quickly and result in an arrest. But the IRS CI unit has teamed up with other federal agencies and departments, such as the Small Business Administration and Department of Labor, to investigate COVID-19 related fraud.[2] In fact, according to Ryan Korner, IRS CI has even been working closely with local law enforcement:
A lot of our COVID-19-related fraud leads, for example, have come from local police departments such as Beverly Hills [California], where they see folks out there in their communities, spending these fraudulently obtained benefits that they’ve received.
Mr. Korner then discussed a current COVID-19 fraud case against “Antonio Baines—a rapper known as Nuke Bizzle—who bragged in a music video called ‘EDD’ about getting rich by committing unemployment benefits fraud.”[3] Baines was arrested and charged for allegedly applying for over $1.2 million in pandemic related unemployment benefits through use of stolen identities.[4]
The government’s message is clear. It is focused on investigating and prosecuting pandemic-related fraud. These investigations can typically last for years, but the government has been able to leverage its vast enforcement network to quickly investigate and arrest individuals based on allegations of fraud. Such a quick timeline of investigation and arrest is rarely, if ever, seen, and this marks a potential dawn of a new era in cooperation between federal agencies.
White Collar Defense Attorneys
Freeman Law represents companies, executives, and individuals in regulatory and white-collar government investigations and prosecutions. We employ a proactive approach to defend vigorously and strategically position our clients. White-collar matters often involve parallel regulatory and civil proceedings. Freeman Law can navigate the complexities and collateral consequences of multiple proceedings. And when it comes to the court of public opinion, we employ ethical and strategic tactics to manage publicity. Schedule a consultation or call (214) 984-3000 to discuss your allegations and investigations concerns.
[1] Frederic Lee, IRS Special Agent Sheds Light on COVID-19 Fraud Investigations, TaxNotes (November 9, 2020).
[2] Id.
[3] Id.
[4] Id.
