Vance, DOJ announce fraud charges against nearly 80 involving COVID-era programs

Kansas City, Missouri —The Justice Department Monday announced a slew of cases in a nationwide crackdown on fraud involving the COVID-19-era Paycheck Protection Program .

The department's enforcement push, which ran from June 12 through Sept. 1 and was dubbed "Heartland fraud surge," resulted in actions involving more than 160 defendants and approximately $245 million in intended losses to taxpayers. The operation was put into action more than five years after the government pushed emergency loans to businesses nationwide that were struggling as a result of the coronavirus pandemic.

The initiative involved prosecutors from 44 U.S. Attorney's Offices, along with more than 20 federal and state investigative partners.

Attorney General Todd Blanche told CBS News in an interview Monday, "We have 500 prosecutors now in D.C. and around the country focused on this. We have prosecutors in all 93 U.S. attorneys' offices now directly focused on this."

Throughout the surge, federal prosecutors and investigators pressed felony charges against nearly 80 defendants in cases involving roughly $100 million in intended losses connected to Small Business Administration COVID-era programs, including the Paycheck Protection Program and Economic Injury Disaster Loan program.

Another approximately 43 defendants pleaded guilty in SBA-related COVID fraud cases involving roughly $44 million in intended losses, while about 40 defendants were sentenced in cases involving nearly $100 million in intended losses.

In total, the summer enforcement activity targeted more than 160 criminal defendants and roughly $245 million in intended losses total, according to the Justice Department.

The cases involve a broad range of alleged schemes, including fabricated businesses, false payroll and revenue information, plus identity theft.

Vice President JD Vance, Attorney General Todd Blanche and FBI Director Kash Patel appeared alongside federal and state law enforcement officials in Kansas City to announce the results of the operation.

The federal investigation targeted fraud in a program that stopped issuing new loans in 2021. Congress established the PPP or the Paycheck Protection Program in March 2020 to prevent businesses from collapsing as sweeping shutdowns and pandemic restrictions upset the economy. Backed by the Small Business Administration, banks and other lenders ultimately made roughly 11.8 million loans totaling about $800 billion. While loans could be forgiven, borrowers had to meet strict requirements, including using the money for payroll and other eligible expenses.

Still, government safeguards lagged behind an onslaught of applications, and since the creation of the program, government watchdogs discovered that major screening tools were not in place until after the approval of hundreds of billions of dollars.