Unraveling the Web of Pandemic Fraud: The Relentless Pursuit of Justice

More than four years after the onset of the COVID-19 pandemic, a relentless hunt continues for those who defrauded federal assistance programs designed to cushion the economic blow. At the forefront of this effort is a team of investigators and prosecutors based in Denver, Colorado, who have proven to be the most successful in reclaiming ill-gotten gains.

Reclaiming Billions: The Tenacious Pursuit of Pandemic Fraud

Seizing Illicit Gains: The Colorado District's Remarkable Success

The U.S. Attorney's Office for the District of Colorado has emerged as a trailblazer in the fight against pandemic-related fraud. Acting U.S. Attorney Matthew Kirsch proudly boasts of his office's remarkable success in forfeiting funds obtained through fraudulent means. Of the .4 billion the government has seized in wrongfully obtained small-business loans under the Economic Injury Disaster Loan (EIDL) program, a staggering billion has been secured through the Colorado District.The key to this success lies in the district's strategic positioning and the utilization of cutting-edge technology. A crucial SBA loan processing center falls under the district's jurisdiction, and a powerful supercomputer has enabled the team to flag fraud in over 58,000 applications from multiple states. While Colorado borrowers represent only a fraction of these forfeitures, the district's efforts have had a significant impact on the overall recovery of illicit funds.

Navigating the Complexities of Criminal Convictions

The pursuit of justice, however, extends beyond civil forfeiture cases. Securing criminal convictions and prison sentences has proven to be a more arduous process, although a recent legislative change has provided a glimmer of hope. In August 2022, Congress extended the statute of limitations on SBA loan fraud from six to ten years, giving prosecutors more time to build and pursue their cases.Kirsch's team, which includes attorneys and investigators from various agencies, has already charged 30 individuals and secured a dozen criminal sentences in Colorado, with more cases expected as time and resources permit. The convicted individuals have collectively stolen million, although their attempted theft amounted to million. Interestingly, Kirsch notes that the majority of these crimes do not appear to be driven by drug use or gambling activities, but rather by opportunistic behavior.

Unraveling the Paper Trail: The Challenges and Successes

Unlike some other financial crimes, pandemic-related fraud often leaves a clear paper trail, making it easier for investigators to prove the fraudulent nature of the activities. This has been a crucial advantage for Kirsch's team, who have meticulously pieced together the evidence to hold perpetrators accountable.One such case involves Chandler Simbeck, who was sentenced to 37 months in prison and ordered to repay 1,000 he had fraudulently borrowed from the federal government. Simbeck admitted to conspiring with Russell Foreman, whom he met at a halfway house, to submit falsified loan applications to the SBA. Their scheme involved creating a fictitious company, Fusion Group, which had never generated any revenue, employed any workers, or engaged in any legitimate business activities.Similarly, the case of Shambrica Washington, a resident of Parker, Texas, highlights the brazen nature of some of these crimes. Washington was found guilty on 31 counts, including wire fraud, bank fraud, money laundering, and false claims, related to two EIDL and two Paycheck Protection Program (PPP) loans totaling nearly 0,000. The proceeds from these loans were used for personal expenses, such as buying a car, a custom-built home, and funding elective surgery.

Pursuing the Elusive: Tracking Down Pandemic Fraudsters

The pursuit of justice extends beyond the borders of Colorado, as evidenced by the case of former Denver hotelier Amin Suliaman, now residing in Miami. Suliaman was indicted in May on four counts of wire fraud related to 0,000 he obtained in EIDL loans for what federal prosecutors claim were inoperable businesses.Another case involves Castle Rock residents Joshua and Magdalena Lybolt, who are accused of taking out several fraudulent loans worth nearly million under the names of four of their businesses. The Lybolts had previously told a bankruptcy court that these businesses were no longer operational, only to later use them to obtain millions in government support.These cases highlight the tenacity and resourcefulness of the investigators and prosecutors in tracking down pandemic fraudsters, even as they attempt to conceal their tracks or relocate to evade justice.

The Lasting Impact of Pandemic Fraud: Eroding Trust and Harming the Vulnerable

While the perpetrators of pandemic fraud may have perceived their actions as victimless crimes, the reality is far more damaging. Their fraudulent activities have eroded public trust in the system, undermining the very programs designed to provide relief and support to those in need.Kirsch emphasizes the particularly galling aspect of pandemic fraud, noting that legitimate claimants were denied assistance when loan funds ran out or systems became bogged down, as was the case with unemployment insurance programs. The diversion of these critical resources has had a direct and detrimental impact on the lives of those who were truly in need of support during the economic upheaval of the pandemic.As the federal government continues to grapple with the staggering scale of pandemic-related fraud, estimated to be as high as 0 billion, the work of Kirsch's team and their counterparts across the country remains crucial. Their relentless pursuit of justice serves not only to reclaim ill-gotten gains but also to restore faith in the system and ensure that those who sought to exploit the crisis are held accountable for their actions.