Western District of Washington receives funding to hire dedicated prosecutor to combat Cares Act Unemployment Insurance fraud

Seattle — United States Attorney Brian T. Moran announced today that the Western District of Washington has been allocated funding to hire an Assistant United States Attorney (AUSA), for a one-year term, who will focus on prosecuting cases involving fraudulent schemes to obtain unemployment insurance (UI) benefits and related offenses through the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020.

The CARES Act allocated $270 billion for supplemental federal UI benefits.  Additionally, President Trump directed that $44 billion in federal Disaster Relief Funds be used to provide supplemental UI benefits to eligible claimants.  The substantial increase in funding for UI benefits spurred a dramatic spike in UI fraud across the country, resulting in the theft of federal funds intended to help those struggling with unemployment during the current pandemic and economic crisis.  

“Federal law enforcement, and the attorneys in this office, acted quickly this spring to alert the state to significant fraud losses and got financial institutions to put a hold on suspicious payments,” said U.S. Attorney Moran.  “We continue the work of identifying and ultimately prosecuting those who defrauded the system.  These extra resources will keep that work moving as we untangle the complex layers of the fraud schemes.”

Last May, the U.S. Attorney’s Office noted that a diligent financial institution, with which agents were working, was able to prevent $120 million from being distributed to criminals.  Agents assisted in freezing and recovering millions of additional dollars, with assistance from scores of other banks and credit unions.  The Social Security Administration Office of the Inspector General, the Secret Service, the FBI, Internal Revenue Service Criminal Investigation, and the United States Postal Inspection Service, and the Department of Labor Office of the Inspector General have all been working to trace the fraud, build criminal cases, and attempt to reclaim the criminal proceeds.  The Washington Employment Security Department is cooperating in the investigation. 

The U.S. Department of Justice, in close coordination with the U.S. Department of Labor and other federal agencies, created the U.S. Department of Justice National Unemployment Insurance Fraud Task Force.  This task force is charged with investigating numerous CARES Act fraud schemes targeting the unemployment insurance programs of state workforce agencies and will work closely with United States Attorneys’ Offices to prosecute those individuals who have fraudulently diverted these funds from those struggling with unemployment. 

The Department encourages the public to report suspected fraud schemes related to COVID-19 (the Coronavirus) to the National Center for Disaster Fraud (NCDF) hotline by phone at (1-866-720-5721) or via an online reporting form available at www.justice.gov/disaster-fraud/webform/ncdf-disaster- complaint-form.