COVID Related Fraud: Coronavirus Aid, Relief and Economic Security (CARES) Act Fraud and Qui Tam
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed and signed into law on March 27, 2020 with the objective of providing direct and indirect assistance to businesses and individuals struggling with the financial fall-out resulting from the COVID-19 virus pandemic. The CARES Act has estimated price tag of $2.2 trillion and is phase three of a series financial stimulus packages.
An estimated $300 billion will be used for direct cash payments to individuals;
$140 billion allocated to support the healthcare system, including $100 billion paid directly to hospitals, with additional $40 billion to be used for medical supplies, support for the CDC and other health related programs;
$150 billion allocated as a relief fund for cities and states to cover emergency expenditures related to Covid-19;
$500 billion allocated for loans, loan guarantees and other investments in businesses and municipalities;
$349 billion allocated to the Paycheck Protection Program, which is a fund available to assist small businesses maintain their payrolls
As with other large government programs, the CARES Act and other covid-19 related programs, are vulnerable to unscrupulous businesses and individuals ready to profiteer from the current crisis. To guard against fraud and abuse and to protect taxpayer funds, Congress provided for oversight, including a Congressional Oversight Board and a Special Inspector General for Pandemic Relief (SIGPR). In addition, the Department of the Treasury and other relevant agencies are likely roll out specific rules, regulations and other requirements to insure that relief money is not improperly diverted from their intended purposes.
But the Government alone cannot police these programs. Whistleblowers have an important role to play in detecting, reporting and prosecuting fraud. The qui tam provisions under state and federal false claims acts allow citizens with evidence of fraud against government programs to sue on behalf of the government to recover the stolen money. As a reward for bringing a qui tam case, the law allows the whistleblower to be awarded a portion of the recovery, typically between 15% and 30%. Originally enacted to combat fraud during the Civil War, the qui tam provisions in the federal False Claims Act have been updated and adapted to become the primary tool of the federal government to fight fraud and protect precious taxpayer dollars.