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4 Emerging Trends To Watch in COVID-19 Fraud Enforcement

Law360

11 Feb 2022

Law360 covered the Morrison & Foerster webinar “Two Years In: An Inside Look at COVID-19 Relief Fraud and What to Expect Next,” which explored the coming second wave of COVID-19 fraud enforcement, one that promises a change in case scale and complexity as regulators plumb large companies and organizations that took aid, and the lenders that issued it.

According to Brian Kidd, the U.S. Department of Justice (DOJ) is likely eyeing larger recoveries from complex matters concerning how big companies and organizations navigated a shifting regulatory landscape.

“COVID relief fraud enforcement is in its infancy and will be with us for many years,” Brian said. “As time passes and investigations mature, we can expect cases brought by the department to become more complex and more sophisticated, including shifting focus to fraud committed by companies and organizations.”

Tina Reynolds added that the Coronavirus Aid, Relief, and Economic Security, or CARES, Act was the largest aid package in U.S. history and required speedy administration, but “coupled with that quick release of funding was a confusing regulatory process” that has caused headaches for businesses and is now complicating investigators’ work.

“Those rules and regulations and applications changed over time, and because of that, made it a little bit more confusing for borrowers to understand exactly what rules applied at any particular time,” she said. “But they’re also making it more difficult for law enforcement, because the rules that apply to one borrower may not apply to another borrower who took out a loan later in time.”

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