Federal authorities have recovered more than $6.5 million in taxpayer funds that were stolen through pandemic-related fraud schemes, according to an announcement by Timothy Courchaine, U.S. Attorney for the District of Arizona.
The recovery comes as a result of a court-ordered judgment in a civil asset forfeiture action. The investigation revealed that fraudsters used stolen personal information and false employment details to apply for unemployment insurance payments distributed during the COVID-19 pandemic. These funds were made available through federal programs such as the CARES Act, the Continued Assistance Act, and the American Rescue Plan Act of 2021, and administered by state agencies including the Arizona Department of Economic Security (ADES).
According to officials, those involved in the scheme opened bank accounts using stolen identities and routed fraudulent payments into these accounts before withdrawing or transferring the money elsewhere. Investigators identified over 2,000 fraudulent accounts linked to more than $6 million in improper payments from ADES.
Timothy Courchaine stated: "Through diligent investigation and the effective use of civil forfeiture, federal agents and prosecutors recovered the taxpayer funds stolen through pandemic-related schemes."
The District of Arizona worked on this case alongside the national DOJ-led COVID Fraud Task Force. This task force is a multi-agency collaboration that has charged numerous individuals and entities with exploiting COVID relief programs and has seized over $1.4 billion in proceeds from such fraud nationwide.
Courchaine added: "As set forth in the civil complaint, COVID-19 pandemic-related unemployment insurance funding was distributed through several federal programs, including the CARES Act, the Continued Assistance Act, and the American Rescue Plan Act of 2021. This funding was administered through state workforce agencies, including the Arizona Department of Economic Security (ADES). Fraudsters, using stolen personal information of U.S. citizens and fabricated employment information, applied for and obtained unemployment insurance payments through ADES. The fraudsters routed the payments to bank accounts they opened using the stolen personal information, then withdrew the funds or transferred them to other accounts. Investigators identified over 2,000 fraudulent accounts that contained over $6 million in payments obtained from ADES. Using civil forfeiture authority, federal prosecutors and investigators were able to seize and recover the funds."
The case was investigated by several agencies including the U.S. Department of Labor’s Office of Inspector General with assistance from both the U.S. Postal Inspection Service and U.S. Secret Service; seizure efforts were supported by the U.S. Marshals Service. Assistant U.S. Attorneys Joseph Bozdech and LaTanya Wateland represented the United States.
