The Ministry of Justice has expanded its crackdown on COVID-19 fraud and announced the first criminal trial alleging misuse of federal aid funds for medical service providers. The immense nature of the alleged fraud and the relatively small amount of funds raised provide valuable clues as to the pace, breadth and focus of future law enforcement efforts.

With the Coronavirus Aid, Aid and Economic Security Act (CARES) enacted on March 29, 2020, the Provider Relief Fund was set up, which distributed funds to medical providers to respond to the pandemic. Earlier this month, the Justice Department criminally accused the Michigan home health services company owner of misusing aid funds for the medical treatment and care of COVID-19 patients by writing family checks for their own use. This is likely the first of many such cases as federal investigators are examining the distribution of the Provider Relief Fund dollars and the use of those funds by the beneficiaries.

The CARES law

The CARES Act should provide emergency financial assistance to those suffering economic losses related to the COVID-19 pandemic. This included the Provider Relief Fund, which specifically funded medical providers to help meet pandemic response and COVID-19 patient care costs.

The government’s first prosecution

Home health services business owner Amina Abbas of Michigan was charged with embezzlement of state property on February 10, 2021. The Justice Department’s crime department claims Abbas intentionally misused government funds allocated to assist medical care providers in treating patients with COVID-19. Abbas becomes the first person to be charged with willful misuse of funds designed to help health care professionals during the coronavirus pandemic.

Abbas previously owned 1 to 1 Home Health, which was closed prior to the pandemic. Even so, the shuttered company reportedly received around $ 38,000 through the Provider Relief Fund to help fund medical treatment for COVID-19 patients. The government claims Abbas distributed the funds to her family members instead.

The investigation was conducted by the Inspector General of the United States Department of Health and Human Services (HHS-OIG) and the FBI.

Predictions for upcoming law enforcement actions

Abbas allegedly embezzled less than $ 40,000, a relatively small amount. As we have, however previously writtenThe first fraud tracking by the Paycheck Protection Program involved loans between $ 30,000 and $ 24 million. That the Justice Department’s initial prosecution by the Provider Relief Fund includes a relatively small loan suggests that the government will aggressively pursue these matters. Accordingly, we can expect a steady influx of new criminal cases focused on government embezzlement in the coming months.

Continue as we do previously discussedThe early PPP fraud prosecutions also appeared to be the most egregious cases. Likewise, the government seems to be focusing on the most brazen examples of embezzlement. In this case, Abbas allegedly used 1 on 1 Home Health, a company that no longer existed, to raise government funds through the Provider Relief Fund and make them available to their family members. We can assume that the first wave of law enforcement will encompass similarly formidable phantom business-related matters.

Just as PPP loan fraud cases came quickly, so should we expect the same speed of prosecution that the Provider Relief Fund has seen. The government provides a national hotline and an online complaint form that are available to anyone with information about misconduct related to COVID-19.

The fact that several federal agencies have been investigating the Abbas matter also suggests that not only will the government spend considerable time and resources pursuing these matters, but that several different government agencies will also be involved in investigating such cases.

Any business owner who has concerns about compliance with the CARES Act Provider Relief Fund should consult an attorney immediately and not wait to be contacted by law enforcement agencies. Those who have already received a subpoena or investigation from a law enforcement agency should immediately contact an attorney who can assess the full potential for civil and criminal law before responding.

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