# Major Fraud Against the United States

Three federal criminal statutes define the scope of fraud against the U.S. government and its programs: 18 U.S.C. § 1031 targets knowing attempts to defraud the government out of $1,000,000 or more th

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## Facts
- Domain: criminal-law
- Category: Federal Criminal Statutes
- Page type: topic
- U.S. Code anchor: none
- Last verified: not recorded

## Article

Three federal criminal statutes define the scope of fraud against the U.S. government and its programs: 18 U.S.C. § 1031 targets knowing attempts to defraud the government out of $1,000,000 or more through contracts, grants, or any federal benefit program; 18 U.S.C. § 1040 targets fraud involving FEMA and other disaster assistance programs; and 18 U.S.C. § 1038 criminalizes spreading false information about terrorist attacks, weapons incidents, and other public emergencies. Together, these statutes cover the full arc of fraud against federal resources — from defense contractor overbilling schemes and emergency benefit fraud to fake bomb threats. The penalties are severe: § 1031 allows fines of up to $5,000,000 per count and aggregated fines up to $10,000,000, with a 7-year statute of limitations. The Attorney General can pay up to $250,000 to informants who provide information leading to prosecution, and employees who blow the whistle on major fraud against the U.S. government have explicit retaliation protections.

## Current Law (2026)

| Parameter | Value |
|-----------|-------|
| Major fraud threshold | $1,000,000 loss to government, or serious risk of injury to any person |
| Fine per count (§ 1031) | Up to $5,000,000 (or 2× government's loss / defendant's gain) |
| Maximum aggregate fine (§ 1031) | $10,000,000 (all counts combined) |
| Statute of limitations (§ 1031) | 7 years (plus any other applicable extensions) |
| Whistleblower reward (§ 1031) | Up to $250,000 from DOJ funds |
| Disaster fraud scope (§ 1040) | Any benefit crossing state lines, mailed, or touching federal property |
| False emergency report sentence (§ 1038) | Up to 5 years (with injury: 20 years; with death: life) |
| Emergency cost repayment (§ 1038) | Mandatory restitution to responding agencies and nonprofit rescue organizations |

## Legal Authority

- **18 U.S.C. § 1031** — Major fraud against the United States: makes it a crime to knowingly defraud the government or obtain government money or property through deception; sets enhanced fines for losses of $1,000,000 or more; establishes a 7-year limitations period; authorizes whistleblower payments and employee anti-retaliation protections.
- **18 U.S.C. § 1040** — Fraud in connection with major disaster or emergency benefits: criminalizes intentional misrepresentation, concealment, or false documentation to obtain any benefit that moves in interstate commerce, is mailed at any point, or involves U.S. government money or property.
- **18 U.S.C. § 1038** — False information and hoaxes: makes it a crime to intentionally spread false or misleading information that could reasonably be believed and purports to describe a violent crime, weapons offense, nuclear incident, or aviation threat; also criminalizes false reports about U.S. service members' deaths or captures during wartime; requires mandatory restitution to government and nonprofit responders.

## How It Works

### Major Fraud Against the Government (18 U.S.C. § 1031)

### What the Statute Covers

Section 1031 targets knowing schemes to defraud the United States — including its departments, agencies, and programs — or to obtain money, property, or "anything of value" from the government through false or fraudulent representations, promises, or documents.

The statute has its roots in government contracting fraud, where overbilling, bid rigging, defective pricing, and false certification schemes can cost the government tens of millions of dollars. It also applies to grant fraud, program fraud, and any other scheme where someone uses lies or deception to obtain government resources.

The threshold for enhanced penalties is a loss (or intended loss) to the government of $1,000,000 or more, or any scheme that put any person at serious risk of physical injury. Below that threshold, ordinary fraud and [false statements statutes](federal-false-statements-perjury.md) (18 U.S.C. §§ 1001–1010) continue to apply, but their fine limits may be lower.

### Penalties and Fines

The penalty structure for § 1031 is deliberately more aggressive than the general fraud statutes:

**Per-count fines**: Up to $5,000,000 per count. The court may also impose a fine equal to up to twice the government's actual loss or twice the defendant's gain from the fraud — whichever is greater. This "double the harm" alternative can exceed even the $5,000,000 maximum in cases where the government's loss is very large.

**Aggregate cap**: Even across multiple counts in a single case, total fines cannot exceed $10,000,000. This cap prevents the penalty from becoming effectively unlimited in complex multi-count indictments while still allowing substantial punishment.

**Limitations period**: Seven years from the date of the offense, plus any time added by other statutes (for example, the wartime tolling provisions of 18 U.S.C. § 3287 that can extend limitations periods for fraud on the government during periods of war or national emergency).

**Fine determination factors**: When setting fines, courts must consider the seriousness of the offense, harm to victims, any previous fines for similar violations, and any other factors the court finds fair. The statute explicitly calls for individualized assessment rather than formulaic application.

### The Whistleblower Incentive and Protection Provisions

Section 1031 contains its own whistleblower mechanisms, separate from the False Claims Act's qui tam provisions:

**Informant payments**: The Attorney General may pay up to $250,000 from Department of Justice funds to anyone who provides information that leads to a criminal prosecution under § 1031. Several categories of people are ineligible: government employees who learned of the fraud through their official duties (unless they separately reported it and were retaliated against), people who had a legal obligation to report to their employer and failed to do so without reasonable justification, people who only share information already in public reports or news accounts, and anyone who participated in the fraud itself.

The Attorney General's decision about whether to pay is entirely discretionary and is not subject to judicial review — a court cannot order the government to pay a reward even if the information directly led to prosecution.

**Employee anti-retaliation**: Any employee who lawfully assists in the prosecution of a § 1031 case — and who did not participate in the fraudulent scheme — has explicit protection against workplace retaliation. If an employer fires, demotes, harasses, or otherwise punishes an employee for cooperating in a major fraud prosecution, that employee can sue for reinstatement, twice the amount of back pay owed (with interest), attorney fees, and other damages. This protection is particularly important in defense contractor environments where employees may face significant pressure not to cooperate with government investigators.

## Disaster and Emergency Benefit Fraud (18 U.S.C. § 1040)

Section 1040, enacted after Hurricane Katrina exposed massive weaknesses in [FEMA](fema-emergency-management.md) benefit distribution (see also [FEMA Disaster Fraud, Contracting, and Accountability Controls](fema-disaster-fraud-contracting-controls.md)), targets fraud involving any "benefit" connected to a presidentially declared major disaster or emergency.

### What Counts as a Benefit

The statute defines "benefit" broadly: any record, voucher, payment, money, or thing of value, as well as any good, service, right, or privilege, provided by the United States, a state or local government, or any other entity. This definition is broad enough to cover:

- FEMA Individual Assistance grants and housing assistance
- [SBA disaster loans](sba-disaster-loans.md)
- Unemployment insurance extensions during federal emergencies
- COVID-era relief programs including PPP loans and EIDL grants
- Supplemental nutrition assistance after disasters
- Federal employee disaster pay

### Federal Jurisdiction

Three independent hooks create federal jurisdiction over disaster benefit fraud:

1. **Interstate commerce**: The benefit's approval, transfer, or payment crosses state lines or affects foreign commerce (which is nearly always true for any federal program)
2. **Mail**: The benefit is mailed at any point during the transaction (applications mailed to state agencies, checks mailed to recipients, etc.)
3. **Federal money or property**: The benefit is a record, voucher, payment, money, or thing of value belonging to the United States or any of its departments or agencies

Any one of these hooks is sufficient. As a practical matter, any benefit from a federally declared disaster program satisfies all three.

### The Fraud Element

The crime requires intentional conduct: the person must knowingly provide false or misleading statements, conceal material facts, or use false documentation to obtain the benefit. Mistakes, errors, or misunderstandings about eligibility criteria do not satisfy the statute. The government must prove the defendant knew the representations were false.

The most common prosecuted schemes include:
- Filing FEMA applications for properties that did not exist or were not damaged
- Using deceased relatives' information to claim disaster assistance
- Filing for disaster-related unemployment when employed
- Obtaining SBA disaster loans using fabricated business financials
- Fraudulent PPP applications claiming false employee counts or payrolls

### Penalties

Section 1040 incorporates the penalty ranges from other fraud statutes by reference, typically resulting in maximum sentences of 10 to 30 years depending on the dollar amounts involved and other factors. Disaster fraud cases frequently involve additional charges — wire fraud (18 U.S.C. § 1343), mail fraud (18 U.S.C. § 1341), bank fraud (18 U.S.C. § 1344), or identity theft (18 U.S.C. § 1028A) — which can produce significantly higher total sentencing exposure.

The Justice Department operates a National Center for Disaster Fraud (NCDF) that receives reports and coordinates prosecutions across U.S. Attorney's Offices nationwide. After COVID-19, the NCDF expanded significantly to handle the volume of pandemic relief fraud cases.

## False Emergency Reports and Hoaxes (18 U.S.C. § 1038)

### What the Statute Covers

Section 1038 targets a different kind of fraud: fake emergency alerts that cause real government resources to be wasted and real public panic. The statute criminalizes intentionally conveying false or misleading information when someone could reasonably believe it is true and when the false claim purports to describe:

- A violent crime
- An attack using chemical, biological, radiological, nuclear, or explosive weapons
- A nuclear incident
- An aviation crime or attack
- Any other category listed in a specific set of federal statutes

The statute also separately covers false reports about the death, capture, injury, or disappearance of U.S. military members during wartime — a provision designed to address misinformation that could devastate military families or disrupt operations.

### "Swatting" and Similar Hoaxes

Section 1038 is the primary federal statute used to prosecute "swatting" — making a fake emergency call to trigger an armed law enforcement response to a victim's location. Swatting incidents have resulted in deaths (including at least one case where police fatally shot an innocent homeowner responding to a SWAT team), and prosecutors have increasingly pursued felony charges under § 1038 in addition to any state charges.

The statute's structure creates escalating penalties that track actual harm:
- False report, no injury to anyone: up to 5 years
- False report causing serious bodily injury: up to 20 years
- False report resulting in death: up to life imprisonment, plus possible death penalty

### Mandatory Restitution

Section 1038 includes a mandatory restitution provision that is unusual in its scope: any person convicted must repay the costs incurred by state and local governments and by nonprofit fire, rescue, and emergency medical organizations that responded to the hoax. This includes overtime pay for law enforcement officers, cost of specialized equipment deployed, and any other reasonable emergency response expenses. The restitution order is enforceable as a civil judgment, and multiple defendants can be held jointly responsible.

## How These Statutes Interact

In federal fraud prosecutions, § 1031, § 1040, and § 1038 rarely stand alone. Prosecutors typically charge them alongside:

- **18 U.S.C. § 1001** ([false statements to federal agencies](federal-false-statements-perjury.md)) — covers the individual lies told to government officials
- **18 U.S.C. § 1341 / § 1343** ([mail and wire fraud](wire-fraud-mail-fraud.md)) — provides additional counts for each use of the mail or electronic communications
- **18 U.S.C. § 1028A** (aggravated identity theft) — mandatory 2-year consecutive sentence if another person's identity was used
- **31 U.S.C. § 3729** (False Claims Act) — parallel civil liability with treble damages and qui tam whistleblower suits

The combination of criminal and civil exposure means that a major government contractor fraud case can result simultaneously in a criminal prosecution under § 1031 (with fines up to $10 million), a False Claims Act civil settlement (often multiples of the actual loss), debarment from future government contracting, and restitution orders.

## How It Affects You

**If you work for a government contractor**: Any knowing scheme to overbill the government, submit false compliance certifications, inflate labor costs, or rig bids on contracts involving $1,000,000 or more in losses to the government is § 1031 territory. The 7-year statute of limitations means conduct going back to 2019 remains prosecutable in 2026. If you discover fraud internally, report it in writing — to your supervisor, ethics hotline, or General Counsel — and preserve a copy. If those channels are blocked or you face retaliation, report directly to the relevant agency Inspector General or the DOJ. Section 1031 gives you explicit whistleblower protection: reinstatement, 2× back pay with interest, attorney fees, and other damages if your employer retaliates for cooperating with investigators. Parallel risk: the False Claims Act's qui tam mechanism allows employees to file sealed lawsuits on the government's behalf and receive 15-25% of the government's recovery, which can be enormous in large contracting cases — FCA treble damages on a $10M fraud equal $30M in civil exposure before criminal fines.

**If you received disaster relief benefits**: Honest mistakes in applications are not crimes under § 1040 — the statute requires intentional conduct, and the government must prove you knew the statements were false. If you received FEMA, SBA, or other disaster assistance based on a mistake you've since discovered, contact the agency directly and offer to repay the overpayment before it becomes an enforcement referral; agencies generally have repayment programs with no criminal consequences for voluntary returns. If you receive a law enforcement inquiry about disaster benefits, consult a criminal defense attorney before saying anything. To report suspected fraud by others, contact the DOJ's National Center for Disaster Fraud (NCDF) at **1-844-872-4332** or submit a complaint online at justice.gov/disaster-fraud — the NCDF coordinates investigations across all U.S. Attorney's Offices nationally.

**If you applied for COVID-era relief programs**: PPP loans, EIDL grants, and pandemic unemployment insurance extensions are squarely within § 1040's scope, and the DOJ treats pandemic fraud prosecution as a sustained priority — not a past-tense effort. The DOJ's COVID-19 Fraud Enforcement Strike Force has obtained hundreds of convictions and is still pursuing cases. The statute of limitations for § 1040 fraud (5 years) and related wire/mail fraud charges (5 years) means applications filed in 2020-2021 potentially remain within the prosecutable window. If you received a PPP loan based on inaccurate data — overstated payroll, incorrect employee counts, or other errors — the SBA's Loan Review and Forgiveness process is the administrative path for resolving discrepancies before they become enforcement matters. Borrowers who proactively return incorrectly received funds and document the error have significantly better outcomes than those who wait for a DOJ contact.

**If you are a government contractor compliance officer**: The combination of § 1031 criminal liability and FCA civil liability makes government contracting fraud among the most aggressively policed areas of federal law. Effective protection requires: (1) accurate cost accounting under DCAA-compliant systems (the Defense Contract Audit Agency audits costs on most defense contracts); (2) current and enforced Code of Business Ethics (required by FAR 52.203-13 for contracts over $5.5M lasting more than 120 days); (3) a functional internal reporting mechanism with documented escalation; and (4) mandatory disclosure of discovered violations to the agency's contracting officer under FAR 52.203-13(b)(3) — failure to disclose known violations within a reasonable time is itself a basis for suspension or debarment. Self-disclosure done promptly and in good faith protects against debarment; voluntary disclosure is a well-established mitigating factor in DOJ charging decisions. Document all compliance actions in writing.

## State Variations

All states have fraud statutes that may apply to schemes involving state-administered federal programs (such as Medicaid, state disaster relief programs, or unemployment insurance). Federal-state jurisdiction in these cases is concurrent. Federal prosecution is more likely in larger-dollar cases, cases with national scope, or cases involving pure federal programs. State prosecution is more common in smaller-dollar disaster fraud and local contractor fraud cases.

## Implementing Regulations

These statutes are enforced primarily through criminal investigation and prosecution rather than through a dedicated CFR scheme. The practical implementation layer comes from DOJ charging policy, FEMA and SBA program rules, federal procurement requirements, and criminal procedure rules that determine how fraud investigations are built and prosecuted. In other words, the statutes define the offense, while the surrounding agency programs define the documents, certifications, and benefit systems that defendants are alleged to have abused.

## Pending Legislation

No major standalone amendment to the core § 1031, § 1040, or § 1038 offense structure is moving as a headline bill in the 119th Congress. Congress is more likely to affect this area indirectly through annual defense authorization, disaster-relief oversight, procurement-integrity, emergency-management, or anti-fraud enforcement legislation.

## Recent Developments

Federal fraud enforcement has stayed especially active in two lanes: government-program fraud and procurement fraud. Pandemic-era cases are still moving through the courts, while procurement, grant, and disaster-benefit cases continue to generate parallel criminal and civil exposure under criminal fraud statutes and the False Claims Act.

Another notable shift is evidentiary rather than statutory: investigators increasingly confront synthetic documents, AI-assisted application packages, and digitally coordinated fraud rings. That trend has not changed the basic elements of §§ 1031, 1040, or 1038, but it has changed how prosecutors prove knowledge, materiality, and loss in modern fraud cases.

In January 2026, KeyBank National Association agreed to pay $7,770,595.25 to resolve False Claims Act allegations that it submitted forgiveness applications to the SBA for approximately 48 fraudulent PPP loans facilitated by a branch manager, Tommy Hawkins, even after its own internal investigation identified many of the loans as likely fraudulent. Hawkins, who recruited borrowers with fictitious or minimal business operations and helped submit applications with false employee counts, payroll figures, and tax documents, was sentenced to 65 months' imprisonment following a May 2024 guilty plea to conspiracy to commit bank fraud. Six additional individuals were charged criminally in connection with the scheme, with several awaiting sentencing. The case illustrates ongoing civil and criminal enforcement exposure for financial institutions that process and seek forgiveness on pandemic-era loans despite internal red flags. [Source](https://oig.ssa.gov/news-releases/2026-01-09-key-bank-agrees-to-pay-7-7-million-to-resolve-branch-manager%E2%80%99s-fraud/)

In January 2026, a former SBA and IRS employee was charged with using their government positions to steal millions of dollars from COVID-19 relief programs. The case is notable because the defendant allegedly exploited insider access to federal systems to facilitate the fraud, illustrating that § 1040 enforcement extends to government insiders, not only outside applicants or financial intermediaries. Prosecution of current and former federal employees for pandemic-era benefit fraud signals continued DOJ prioritization of COVID relief fraud cases well into 2026. [Source](https://www.sba.gov/article/2026/01/12/former-sba-irs-employee-charged-using-government-positions-steal-millions-covid-relief-programs)

In January 2026, luxury home builders and their owners agreed to pay $2.65 million to resolve loan fraud allegations, representing another False Claims Act civil settlement arising from pandemic-era relief program abuse. The case adds to a pattern of civil enforcement actions in which businesses and individuals who obtained fraudulent loans face substantial financial liability alongside any criminal exposure. It illustrates that DOJ and SBA continue to pursue civil resolutions against a broad range of borrower types — including high-revenue construction businesses — well into 2026. [Source](https://www.sba.gov/article/2026/01/20/luxury-home-builders-owners-pay-265-million-resolve-loan-fraud-allegations)

In January 2026, a couple was charged in connection with a COVID-19 fraud scheme, according to a Department of Justice announcement coordinated with the SBA. The case adds to a continuing pattern of criminal charges arising from pandemic-era relief program abuse, illustrating that DOJ and SBA are still initiating new prosecutions against individual borrowers well into 2026. The charges fall within the scope of 18 U.S.C. § 1040, which criminalizes intentional misrepresentation to obtain federally connected disaster or emergency benefits. [Source](https://www.sba.gov/article/2026/01/26/couple-charged-covid-19-fraud-scheme)

In January 2026, the United States obtained a False Claims Act judgment against a California rehabilitation center and its owner for an improper Paycheck Protection Program loan, adding to the pattern of civil enforcement actions arising from pandemic-era relief fraud. Unlike the settled cases already noted in this article, this outcome reflects a litigated judgment rather than a negotiated resolution, illustrating that DOJ and SBA will pursue contested civil proceedings against PPP borrowers who do not settle. The case further demonstrates that enforcement actions under the False Claims Act continue to reach a broad range of business types, including healthcare providers. [Source](https://www.sba.gov/article/2026/01/26/united-states-obtains-false-claims-act-judgment-against-california-rehabilitation-center-owner)

In February 2026, the final defendant in a $7.7 million pandemic fraud scheme was sentenced, completing criminal proceedings against all eight individuals charged in the case. The scheme, which involved fraudulent PPP and other COVID-19 relief applications, resulted in convictions and sentences across all eight defendants. The conclusion of this multi-defendant prosecution illustrates that complex pandemic-era fraud cases involving numerous participants continue to reach final resolution well into 2026. [Source](https://www.sba.gov/article/2026/02/02/last-eight-defendants-sentenced-77-million-pandemic-fraud-scheme)

In February 2026, four individuals were charged in the District of Massachusetts in connection with a multi-state conspiracy that used stolen identities of more than 100 people to fraudulently obtain approximately $440,000 in SNAP benefits from Massachusetts and Rhode Island and over $700,000 in Pandemic Unemployment Assistance benefits across six states. The defendants allegedly used counterfeit identity documents to create fictitious SNAP households and funneled fraudulently obtained food benefits to stock a restaurant they operated, wiring proceeds to individuals in Venezuela and the Dominican Republic. The case illustrates that § 1040 enforcement extends beyond FEMA and PPP contexts to encompass identity-based fraud targeting federally connected nutrition and unemployment programs, and that multi-agency investigations—here involving USDA-OIG, DOL-OIG, IRS-CI, and HSI—continue to generate new criminal charges against benefit fraud rings well into 2026. [Source](https://oig.ssa.gov/news-releases/2026-02-05-four-charged-in-multi-state-snap-and-pua-fraud-conspiracy/)

On January 27, 2026, Carl Delano Torjagbo of Marietta, Georgia, was sentenced to 14 years and 7 months in federal prison and ordered to forfeit millions in cash and property after a jury convicted him of bank fraud, wire fraud, and money laundering arising from a fraudulent $9.6 million PPP loan and a $3.4 million fraudulent IRS refund — a combined $13 million scheme. Torjagbo fabricated a sham gold-mining business, Kremkov Industries, listing celebrities and fictional characters including Keanu Reeves and Charlie Brown as employees on phony payroll records submitted to support the PPP application. The court also ordered restitution of at least $3,366,240.76 and forfeiture of a Marietta mansion, three luxury vehicles, bank account funds, and Georgia real estate. The case, investigated by the FBI, IRS Criminal Investigation, and TIGTA, represents one of the largest single-instance PPP fraud sentences and illustrates continued aggressive prosecution of pandemic-era relief fraud well into 2026. [Source](https://oig.ssa.gov/news-releases/2026-02-05-marietta-scam-artist-sentenced-to-nearly-15-years-in-federal-prison-for-13-million-ppp-fraud-and-tax-scheme/)

In February 2026, the SBA suspended 111,620 California borrowers suspected of committing approximately $8.6 billion in pandemic-era fraud, representing one of the largest single administrative enforcement actions arising from COVID-19 relief program abuse. The suspensions reflect the SBA's use of administrative remedies — distinct from criminal prosecution under 18 U.S.C. § 1040 or civil False Claims Act proceedings — to address suspected fraud at scale. This action illustrates that enforcement exposure for pandemic-era relief fraud extends beyond individual criminal and civil cases to include broad administrative consequences affecting large numbers of borrowers simultaneously. [Source](https://www.sba.gov/article/2026/02/06/sba-suspends-111620-california-borrowers-suspected-committing-86-billion-pandemic-era-fraud)

In February 2026, David Lam, a former Social Security Administration operations supervisor and claims specialist in Houston, was sentenced to 84 months in federal prison and ordered to pay $3,346,280 in restitution after pleading guilty to aggravated identity theft and conspiracy to steal government funds. Lam exploited his authorized access to SSA systems to steal the personally identifying information of recently deceased men, then recruited coconspirators to file fraudulent survivor benefits applications listing the deceased as fathers or stepfathers of children they had no connection to, splitting the stolen funds via mobile payment apps. The case extends the pattern of insider-threat enforcement already noted in this article — alongside the charged former SBA and IRS employee — illustrating that § 1040 and related identity theft statutes reach government employees who weaponize privileged system access to defraud federal benefit programs. [Source](https://oig.ssa.gov/news-releases/2026-02-09-social-security-employee-sentenced-in-multimillion-dollar-fraud-and-identity-theft-scheme/)

In February 2026, a Colombian national unlawfully residing in Boston was convicted following a jury trial of aggravated identity theft, false representation of a Social Security number, three counts of receiving stolen government money or property, making a false statement in a U.S. passport application, and fraudulent voting. Lina Maria Orovio-Hernandez lived under a stolen identity for more than 20 years, using it to fraudulently collect approximately $400,000 in federal benefits — including $259,589 in Section 8 rental assistance, $101,257 in Social Security disability benefits, and $43,348 in SNAP benefits — and to cast a fraudulent ballot in the November 2024 presidential election. The case illustrates that § 1040 and related identity theft statutes reach long-running, multi-program benefit fraud schemes in which a single stolen identity is used to access housing, disability, and nutrition assistance simultaneously across more than a decade. The investigation was conducted jointly by SSA OIG, HUD OIG, USDA OIG, the State Department's Diplomatic Security Service, and the U.S. Postal Inspection Service. [Source](https://oig.ssa.gov/news-releases/2026-02-09-colombian-national-convicted-of-voter-fraud-federal-benefit-fraud-and-identity-theft-offenses/)

On February 6, 2026, Alice + Olivia, LLC agreed to pay $3,200,000 to resolve False Claims Act allegations that it falsely certified eligibility for a $2,000,000 Second-Draw PPP loan in January 2021, when the company (together with its domestic and foreign affiliates) employed more than the 300-employee ceiling for Second-Draw eligibility. The company admitted it understated its employee count in both the loan application and the subsequent forgiveness application, and the government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act. The case, brought by the U.S. Attorney for the Southern District of New York and investigated by SBA-OIG, illustrates that False Claims Act civil enforcement for PPP eligibility misrepresentations extends to well-known consumer brands and that affiliate-employee aggregation rules remain an active basis for liability. [Source](https://www.sba.gov/article/2026/02/06/us-attorney-announces-32-million-settlement-fashion-company-relating-improper-receipt-paycheck)

On February 10, 2026, a federal court in the Middle District of Pennsylvania sentenced Joshua White to 96 months' imprisonment and ordered him to pay more than $2.3 million in restitution, completing sentencing for all four defendants in a multi-year conspiracy to defraud the PPP and EIDL programs. The scheme, led by Creed White—who was sentenced to 10 years' imprisonment in October 2025—involved approximately 120 fraudulent loan applications submitted on behalf of 18 dormant businesses with no actual operations or employees, resulting in more than $11.5 million in fraudulently obtained proceeds. Coconspirators created fabricated business, banking, and tax records to support the applications, and Joshua White separately obtained a $175,000 fraudulent PPP loan for a dormant business he owned. The case, investigated by IRS-CI, SBA-OIG, and Treasury-OIG, represents one of the largest PPP and EIDL fraud prosecutions in the Middle District of Pennsylvania and illustrates continued criminal enforcement of pandemic-era relief fraud into 2026. [Source](https://www.sba.gov/article/2026/02/12/federal-court-sentences-four-defendants-115-million-covid-19-fraud-scheme)

On February 18, 2026, Peter N. Sinju, a Salt Lake City accountant, was sentenced after pleading guilty in December 2025 to wire fraud for fraudulently obtaining approximately $221,400 in PPP and EIDL funds by submitting at least nine fraudulent loan applications on behalf of clients without their knowledge. Sinju inflated payroll and gross revenue figures, fabricated payroll sheets listing nonexistent employees, and applied for a total of approximately $461,197.50 in fraudulent loans, though some applications were denied; he personally profited approximately $10,150 in fees charged to his unwitting clients, which the court ordered him to repay in restitution. The case, investigated jointly by the FBI Salt Lake City Field Office and SBA-OIG, is notable because the fraud was perpetrated by a trusted professional against his own clients rather than directly by the loan recipients, illustrating that § 1040 and wire fraud liability extends to third-party intermediaries who exploit client financial data to submit unauthorized applications. [Source](https://www.sba.gov/article/2026/02/18/utah-accountant-sentenced-after-fraudulently-obtaining-over-221000-paycheck-protection-program-loan)

On February 19, 2026, four individuals—Sniders Jean-Jacques, Lorne Johnson, Tanya Pierre, and Ashley Spike—were indicted on one count each of conspiracy to commit wire fraud for their alleged roles in a multi-state scheme to obtain approximately $7 million in fraudulent PPP loans. The defendants allegedly recruited ineligible borrowers, fabricated tax forms to support the applications, and collected kickbacks of up to 30 percent of loan proceeds as fees. Jean-Jacques and Pierre face a separate indictment for conspiracy to commit wire and bank fraud related to fraudulent mortgage loans and apartment leases. The case, prosecuted in the District of Massachusetts and investigated by IRS-CI, SBA-OIG, and the U.S. Secret Service, illustrates that the DOJ's COVID-19 Fraud Enforcement Task Force continues to initiate new multi-defendant PPP fraud prosecutions in 2026. [Source](https://www.sba.gov/article/2026/02/19/four-charged-7-million-pandemic-relief-fraud-scheme)

On February 18, 2026, John Bolden, a former New York City Police Department detective, pleaded guilty in federal court in Brooklyn to wire fraud conspiracy in connection with a PPP fraud scheme. Bolden, who co-owned a tax preparation franchise with fellow former NYPD detective Anthony Carreira, prepared fictitious IRS Schedule C documentation and helped submit fraudulent loan applications for himself, his co-defendants, and more than 65 clients between May 2020 and October 2022, obtaining PPP funds based on false employment, gross income, and net income figures. A second former NYPD detective, Carreira, and Bolden's cousin Christian McKenzie previously pleaded guilty to participating in the scheme; all three face up to 30 years in prison at sentencing. The case, prosecuted in the Eastern District of New York and investigated by the FBI, SBA-OIG, and multiple other agencies, illustrates that PPP fraud enforcement extends to law enforcement professionals who exploited their positions in the tax preparation industry to orchestrate fraud on behalf of dozens of clients. [Source](https://www.sba.gov/article/2026/02/18/former-new-york-city-police-department-detective-pleads-guilty-orchestrating-paycheck-protection)

On February 19, 2026, five individuals—Sniders Jean-Jacques, German Olivo, Jim Kelly Michel, Tanya Pierre, and Rosalie Clement-Jackson—were indicted in the District of Massachusetts on one count each of conspiracy to commit wire and bank fraud for their alleged roles in a scheme to obtain more than $3.7 million in mortgage loans and dozens of luxury apartment leases by submitting fraudulent applications supported by fake paystubs, forged bank statements, and stolen Social Security numbers, out of more than $6.7 million applied for between approximately May 2018 and June 2025. The defendants allegedly used 'tradeline' manipulation to artificially boost applicants' credit scores and concealed true tenants' identities from landlords. Jean-Jacques and Pierre were separately charged in connection with a PPP fraud scheme already noted in this article. The case, investigated by IRS-CI, SBA-OIG, the U.S. Secret Service, FHFA-OIG, and HUD-OIG, illustrates that mortgage and rental fraud schemes involving fabricated financial records and identity misuse can generate parallel federal criminal exposure alongside pandemic-relief fraud charges. [Source](https://www.sba.gov/article/2026/02/19/five-individuals-charged-multi-million-dollar-mortgage-apartment-fraud-scheme)

On February 24, 2026, the SBA Office of Inspector General and the USDA Office of Inspector General signed a data sharing agreement to strengthen coordination in detecting, referring, and supporting investigations into fraud affecting federal programs. The agreement, announced following a meeting in Los Angeles with the First Assistant U.S. Attorney for the Central District of California, is designed to improve information flow, identify fraud indicators earlier, and support investigative and prosecutorial work through more timely access to relevant data and analytics. The partnership is notable as an interagency administrative development that complements ongoing criminal enforcement under 18 U.S.C. § 1040 and related statutes by accelerating the detection of fraud across SBA and USDA programs — including nutrition assistance programs such as SNAP, which have already generated criminal charges in the 119th Congress. [Source](https://www.sba.gov/article/2026/02/24/sba-inspector-general-usda-inspector-general-sign-data-sharing-agreement-strengthen-fraud-detection)

On February 18, 2026, Brandie S. Williams of Dallas, Texas, and Brittany L. Herbert of Brandywine, Maryland, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. in the Western District of New York to conspiracy to commit wire fraud and bank fraud, carrying a maximum penalty of 30 years in prison and a $1,000,000 fine; Herbert also pleaded guilty to a separate count of bank fraud. Between May 2020 and June 2021, Williams and Herbert conspired with previously convicted co-defendants Adam Arena and Amanda Gloria to fraudulently obtain COVID-19 PPP loans — including an approximately $292,700 loan for Williams's business supported by a fabricated IRS tax form falsely claiming 25 employees and $1.4 million in 2019 payroll when the business had none, and an approximately $954,000 loan for Arena's business — with Williams diverting proceeds to her own personal use and transferring over $43,000 to accounts controlled by co-conspirators. Williams is scheduled to be sentenced on June 11, 2026, and Herbert on July 8, 2026. The case, investigated by the FBI, IRS-CI, the U.S. Postal Inspection Service, and SSA-OIG, adds to the continuing pattern of new PPP fraud guilty pleas in 2026 involving fabricated payroll records and misappropriation of loan proceeds. [Source](https://oig.ssa.gov/news-releases/2026-02-18-texas-and-maryland-women-plead-guilty-to-covid-fraud/)

On February 26, 2026, Peter Igwacho, a 65-year-old Cameroonian national residing in Anchorage, Alaska, was sentenced to 21 months in federal prison and three years of supervised release, and ordered to pay $182,225.15 in restitution, after a jury convicted him on three counts of wire fraud following a three-day trial in August 2025. Between April 2020 and October 2021, Igwacho filed at least five fraudulent PPP and EIDL applications on behalf of a sole proprietorship that had no actual operations, employees, or the reported gross revenues, and spent the fraudulently obtained funds on personal expenses rather than approved pandemic-related costs. The case was investigated by SBA-OIG and TIGTA and prosecuted in the District of Oregon. [Source](https://www.sba.gov/article/2026/02/26/alaska-resident-sentenced-federal-prison-wire-fraud)

On March 2, 2026, SBA Inspector General William W. Kirk and USDA Inspector General John Walk met in San Diego with Adam Gordon, U.S. Attorney for the Southern District of California, to reinforce coordinated enforcement against federal program fraud in the region. The agencies identified California as a high-risk environment for fraud due to the scale and sophistication of schemes targeting SBA and USDA programs, and committed to earlier identification of misconduct and aggressive case referrals to federal prosecutors. The meeting followed the February 24, 2026 SBA-OIG/USDA-OIG data sharing agreement and signals that the interagency enforcement posture is being operationalized at the district level, with the Southern District of California designated as a priority jurisdiction. [Source](https://www.sba.gov/article/2026/03/02/sba-oig-usda-oig-joint-engagement-california-signals-heightened-enforcement-posture-against-federal)

On February 27, 2026, Richard Burke, age 76, of Bradford County, Pennsylvania, was sentenced to one year of probation and ordered to pay $350,634.23 in restitution after pleading guilty to wire fraud. From April 2005 until March 2022, Burke withdrew his deceased mother's Social Security and Veterans Affairs death pension benefit payments from her bank account using her bank card, never notifying SSA or VA of her death. The case illustrates that federal benefit fraud enforcement — here involving wire fraud and mandatory restitution — extends to long-running schemes in which survivors conceal a beneficiary's death to continue collecting payments over many years. The investigation was conducted jointly by SSA-OIG and VA-OIG and prosecuted in the Middle District of Pennsylvania. [Source](https://oig.ssa.gov/news-releases/2026-02-27-bradford-county-man-sentenced-to-one-year-of-probation-for-wire-fraud/)

On March 5, 2026, the House Ways and Means Work & Welfare Subcommittee, chaired by Rep. Darin LaHood (IL-16), held a hearing focused on reclaiming fraudulent pandemic unemployment funds that remain frozen in bank accounts. The hearing signals active congressional oversight of the recovery of pandemic-era benefit fraud proceeds — a dimension of enforcement distinct from the criminal prosecutions and civil False Claims Act settlements already documented in this article. The subcommittee's focus on funds held by financial institutions suggests that legislative or administrative action to facilitate recovery of frozen fraud proceeds may be under consideration, though no specific bill has been introduced. [Source](https://waysandmeans.house.gov/2026/03/05/work-welfare-subcommittee-chairman-lahood-opening-statement-hearing-on-reclaiming-forgotten-fraudulent-pandemic-unemployment-funds-frozen-by-banks/)

On March 5, 2026, James Carroll Erny, Jr., 55, of Glen Arm, Maryland, pleaded guilty in the District of Maryland to bribing Joseph Gillespie, a former Baltimore City Department of Finance employee, paying at least $25,000 in cash, Cash App, and Zelle payments in exchange for Gillespie delaying, removing, or extinguishing unpaid citations, tax obligations, and water obligations Erny owed to the City of Baltimore, causing the City losses exceeding $145,000. Erny separately admitted to fraudulently obtaining $996,240 in PPP funds and attempting to obtain more than $100,000 in EIDL funds, adding a COVID-19 relief fraud dimension to the bribery prosecution. Erny faces a maximum of 10 years in federal prison for bribery and is scheduled for sentencing on June 9, 2026; Gillespie was sentenced to four years in prison in February 2025 for his role in the wire-fraud conspiracy. The case, investigated by the FBI, SBA-OIG, and Baltimore County Police Department, illustrates that § 1040 enforcement can arise alongside public corruption charges where a defendant combines pandemic relief fraud with bribery of local government officials. [Source](https://www.sba.gov/article/2026/03/05/baltimore-county-man-pleads-guilty-bribing-former-baltimore-city-finance-official)

On March 5, 2026, Nacole M. Taylor, 43, a tax preparer from St. Louis County, Missouri, pleaded guilty to three counts of wire fraud and one count of engaging in an unlawful monetary transaction after admitting to fraudulently obtaining at least $1.2 million in PPP loans and COVID-19 EIDL funds for herself and others between 2020 and 2021. Taylor submitted at least 15 fraudulent PPP applications on behalf of eight corporations — six of which she created solely to obtain loans — using inflated payroll figures and fabricated tax forms, and spent the proceeds on luxury goods; she also recruited clients of her tax preparation business to allow her to submit fraudulent applications in their names, collecting at least $152,205 in kickbacks and obtaining approximately $986,659 in loans for coconspirators. Taylor faces a maximum of 20 years in prison on each wire fraud count and 10 years on the unlawful monetary transaction count, and will be ordered to pay restitution; sentencing is scheduled for June 9, 2026. The case, investigated by IRS-CI and SSA-OIG and prosecuted in the Eastern District of Missouri, adds to the pattern of third-party intermediary liability under § 1040 and related wire fraud statutes — alongside the Utah accountant and former NYPD detective cases already noted — illustrating that tax preparers who exploit client relationships to orchestrate unauthorized or fraudulent loan applications face substantial criminal exposure. [Source](https://oig.ssa.gov/news-releases/2026-03-05-st-louis-county-tax-preparer-admits-1-2-million-in-pandemic-fraud/)

In March 2026, the U.S. Attorney's Office for the Eastern District of Missouri announced that a newly funded Special Assistant U.S. Attorney position, supported by the Social Security Administration, had resulted in the indictment of 14 individuals accused of defrauding the government of approximately $1 million through disability fraud, pandemic relief fraud, and theft of Social Security and Veterans Administration benefits. The position is one of nearly two dozen new SSA-funded prosecutor slots recently added nationwide, bringing the total to 47 across 43 U.S. Attorney Offices, with further expansion expected. The program was expanded pursuant to a Presidential Memorandum signed on April 15, 2025, which also directed SSA to prioritize placing new detailees in the ten U.S. Attorney Offices covering the largest known populations of undocumented immigrants, and established a parallel HHS-funded prosecutor program targeting fraud within CMS-administered programs. The development illustrates that dedicated prosecutorial resources for Social Security and related benefit fraud are being scaled up at the district level, complementing the broader criminal enforcement activity under 18 U.S.C. § 1040 and related statutes already documented in this article. [Source](https://oig.ssa.gov/news-releases/2026-03-05-new-federal-prosecutor-targets-social-security-other-government-frauds/)

On March 4, 2026, Kathleen Mannion, 59, a former IRS contact representative from Lawrence, Massachusetts, was sentenced to 18 months in federal prison and three years of supervised release after pleading guilty in May 2025 to four counts of aiding and assisting in the preparation and filing of false tax returns and one count of theft of government money. Between approximately July 2020 and April 2023, Mannion prepared fraudulent tax returns for other individuals without disclosing her role as preparer, listed ineligible dependents to inflate refund amounts, and directed portions of the fraudulently obtained refunds to her own bank accounts without the taxpayers' knowledge. Separately, between April and October 2020, Mannion applied for Social Security retirement, spouse, and widow benefits on behalf of other individuals and redirected those payments to her personal accounts. The case extends the insider-threat enforcement pattern already documented in this article — alongside the sentenced former SSA supervisor David Lam and the charged former SBA and IRS employee — illustrating that federal employees who exploit prior government experience and system access to defraud tax and Social Security benefit programs face criminal liability under theft-of-government-money and related statutes. [Source](https://oig.ssa.gov/news-releases/2026-03-05-former-irs-employee-sentenced-to-prison-for-tax-fraud-and-social-security-fraud/)

On March 9, 2026, Ricardo Santiago, 60, of Hartford, Connecticut, was sentenced to 57 months in federal prison and three years of supervised release and ordered to pay $371,686 in restitution after pleading guilty to wire fraud. Between 2002 and 2024, Santiago concealed more than $580,000 in earnings from over 20 employers by using a stolen Social Security number, fraudulently collecting more than $316,000 in Social Security disability benefits, more than $18,000 in SNAP benefits, and more than $36,000 in pandemic-era unemployment insurance payments to which he was not entitled. The case is notable for its duration — spanning more than two decades — and for Santiago's attempt, while released on bond awaiting sentencing, to stage his own drowning in the Connecticut River before being located by Hartford Police. The investigation was conducted jointly by SSA-OIG, USDA-OIG, DOL-OIG, and DOT-OIG, illustrating that long-running, multi-program benefit fraud schemes involving identity misuse continue to generate substantial criminal sentences well into 2026. [Source](https://oig.ssa.gov/news-releases/2026-03-09-hartford-man-sentenced-to-57-months-in-prison-for-fraudulently-collecting-social-security-unemployment-and-food-stamp-benefits/)

On March 10, 2026, Sean Eric Thompson, 44, formerly of Pace, Florida, was sentenced to four years in federal prison after pleading guilty to five counts of wire fraud, three counts of making a false statement, six counts of money laundering, and three counts of bankruptcy fraud. Thompson submitted a fraudulent Restaurant Revitalization Fund application to the SBA in May 2021, falsely claiming $1,128,233 in COVID-19-related losses and then spending the disbursed funds on personal expenses, including transferring $150,000 to his personal investment account. He subsequently filed for bankruptcy in August 2023, omitting the RRF funds and an interest in a second business from his petition, testified falsely at a creditors' meeting, and caused fraudulently altered financial statements to be submitted to the bankruptcy trustee. The case, investigated by the FBI and SBA-OIG and prosecuted in the Northern District of Florida, illustrates that § 1040 enforcement extends to Restaurant Revitalization Fund fraud and that defendants who compound pandemic relief fraud with bankruptcy fraud face compounded criminal exposure across multiple federal statutes. [Source](https://www.sba.gov/article/2026/03/10/fraudster-sentenced-federal-prison-covid-bankruptcy-schemes)

On March 16, 2026, the House Ways and Means Work & Welfare Subcommittee published a summary of its hearing on reclaiming fraudulent pandemic unemployment funds frozen in bank accounts, revealing that the Department of Labor Inspector General has identified approximately $912 million in taxpayer funds flagged for fraud that remain held by financial institutions on unreconciled prepaid debit cards. The Inspector General testified that the office supports extending the statute of limitations for prosecuting pandemic unemployment fraud from five to ten years, and that investigators have obtained information from arrested suspects indicating that some fraudsters are deliberately waiting for the limitations period to expire before withdrawing funds from frozen cards. The Pandemic Unemployment Fraud Enforcement Act (H.R. 1156), which would extend that limitations period, passed the House with broad bipartisan support but has not advanced in the Senate. Expert witnesses also urged Congress to create a national fraud recovery coordinator, establish a clear legal pathway for financial institutions to return frozen funds to the government, and resolve conflicting regulatory obligations that currently complicate bank cooperation with recovery efforts. [Source](https://waysandmeans.house.gov/2026/03/16/three-key-moments-hearing-on-reclaiming-forgotten-fraudulent-pandemic-unemployment-funds-frozen-by-banks/)

On March 16, 2026, Caleb Walsh, 36, of Apollo Beach, Florida, was charged by federal indictment with bank fraud, wire fraud, and illegal monetary transactions in connection with a scheme to submit fraudulent PPP loan applications in the names of companies he controlled between March 2020 and March 2021. Walsh allegedly misrepresented employee counts, average monthly payroll costs, and the intended use of funds, and supported the applications with false IRS tax forms and altered or fictitious bank statements; he then used the fraudulently obtained proceeds to purchase a luxury vehicle, invest in a Nebraska hotel, buy cryptocurrency, and fund private jet flights to Mexico. If convicted on all counts, Walsh faces a maximum penalty of 30 years in federal prison, and the government has notified him of its intent to forfeit a Mercedes-Benz G-Wagon, the hotel, and cryptocurrency traceable to the offense. The case, investigated by FDIC-OIG, IRS-CI, the FBI, and SBA-OIG and prosecuted in the Middle District of Florida, adds to the continuing pattern of new PPP fraud indictments initiated by the COVID-19 Fraud Enforcement Task Force well into 2026. [Source](https://www.sba.gov/article/2026/03/16/apollo-beach-businessman-charged-covid-19-fraud)

On March 16, 2026, Carie Hallford, 49, of Colorado Springs was sentenced to 216 months in federal prison, three years of supervised release, and $1,070,413.74 in restitution after pleading guilty to conspiracy to commit wire fraud. Hallford and her then-husband Jon Hallford — who was sentenced to 240 months in June 2025 — owned and operated Return to Nature Funeral Home, where they failed to cremate or bury at least 190 bodies over four years while collecting more than $130,000 from grieving families for services never rendered. The couple separately defrauded the SBA by submitting fraudulent EIDL applications between March 2020 and March 2022, receiving three disbursements totaling $882,300 in COVID-19 relief funds. The case illustrates that § 1040 EIDL fraud enforcement extends to operators of small service businesses who combined pandemic relief fraud with an underlying consumer fraud scheme, and that the COVID-19 Fraud Strike Force continues to bring cases to final sentencing well into 2026. [Source](https://www.sba.gov/article/2026/03/16/second-southern-colorado-funeral-home-operator-sentenced-18-years-federal-prison-after-pleading)

On March 17, 2026, a federal court in the Southern District of Florida revoked the U.S. citizenship of Joff Stenn Wroy Philossaint, 25, of Fort Lauderdale, after determining that he had illegally procured citizenship by making false statements to immigration officials during a December 2020 naturalization interview — concealing his ongoing involvement in a COVID-19 relief fraud scheme. Between April 2020 and May 2021, Philossaint and coconspirators submitted 40 fraudulent PPP loan applications containing false revenue and payroll figures, obtaining approximately $3.8 million in proceeds, with Philossaint personally receiving approximately $549,000 in loan proceeds and kickbacks. Philossaint had previously been sentenced to 50 months in federal prison following guilty pleas to conspiracy to commit wire fraud and two counts of conspiracy to launder money, and a jury conviction on unlawful procurement of citizenship. The case illustrates that § 1040 pandemic relief fraud enforcement can trigger collateral immigration consequences — including denaturalization — where a defendant's criminal conduct overlaps with the naturalization process. [Source](https://www.sba.gov/article/2026/03/17/court-revokes-citizenship-fraudster-after-38-million-covid-19-relief-fraud-scheme)

On March 17, 2026, Jane Doe (a/k/a Rosario Alaniz), 69, of Bradenton, Florida, was sentenced to 15 months in federal prison and ordered to pay $184,904.75 in restitution after pleading guilty in December 2025 to passport fraud, Social Security fraud, wire fraud, and theft of government funds. Doe fraudulently obtained a U.S. passport and used the false identity to collect approximately $184,904.75 in SNAP and Social Security disability insurance benefits, concealing employment and receiving payments she was not entitled to or in excess of authorized amounts. The case extends the pattern of multi-program identity-based benefit fraud enforcement already documented in this article — alongside the convictions of Lina Maria Orovio-Hernandez and Ricardo Santiago — illustrating that federal prosecutors continue to pursue cases in which a single fraudulent identity is used to access nutrition, disability, and other federally connected benefit programs simultaneously. The investigation was conducted jointly by the State Department's Diplomatic Security Service, SSA-OIG, Homeland Security Investigations, USDA-OIG, and HHS-OIG. [Source](https://oig.ssa.gov/news-releases/2026-03-17-bradenton-woman-sentenced-for-passport-fraud-and-theft-related-to-government-funds/)

On March 18, 2026, Frank Hamilton, 55, of Simi Valley, California, was sentenced to 66 months in federal prison and ordered to pay $6,093,024.90 in restitution after pleading guilty to wire fraud conspiracy affecting a financial institution. Hamilton and his co-conspirators defrauded multiple banks, other lenders, and the SBA out of millions of dollars by submitting fraudulent SBA 7(a) loans before the pandemic and then transitioning to fraudulent EIDL and PPP applications during the pandemic, using fake tax returns, shelf companies, and fabricated supporting documents; Hamilton retained the majority of co-conspirators' loan proceeds for himself, causing more than $7 million in losses to the SBA when nearly all loans defaulted. The case is notable for its pre-pandemic origins in SBA 7(a) loan fraud and its evolution into pandemic-era EIDL and PPP fraud, illustrating that § 1040 and wire fraud enforcement extends to sophisticated multi-year schemes in which a central organizer orchestrates fraud on behalf of numerous co-conspirators while personally profiting from their proceeds. The investigation was conducted jointly by SBA-OIG, the FBI, IRS-CI, Homeland Security Investigations, and ICE, and prosecuted in the Eastern District of Pennsylvania. [Source](https://www.sba.gov/article/2026/03/18/california-man-sentenced-five-half-years-prison-loan-fraud-conspiracy)

On March 18, 2026, Bruce Choi, 34, a rideshare driver from the Koreatown neighborhood of Los Angeles, was arrested at San Francisco International Airport on a five-count federal indictment charging him with four counts of wire fraud affecting a financial institution and one count of transactional money laundering in connection with a scheme to fraudulently obtain more than $2 million in COVID-19 pandemic business-relief loans. Choi allegedly submitted fraudulent PPP and EIDL applications on behalf of nonexistent companies — including "Premier Republic," which he falsely represented as having an average monthly payroll of $798,000 and gross receipts of nearly $11.8 million in 2019 — supported by fabricated tax returns, fake bank statements, and false employee counts; he then wired the fraudulently obtained proceeds to a Kraken cryptocurrency exchange account, and federal prosecutors have seized nearly 40 bitcoins and other cryptocurrency pursuant to a court-issued warrant. The indictment, returned in October 2025 and unsealed at the time of arrest, was investigated by IRS-CI, FDIC-OIG, Homeland Security Investigations, TIGTA, and SBA-OIG, and is being prosecuted in the Central District of California. If convicted on all counts, Choi faces a maximum of 30 years in federal prison on each wire fraud count and up to 10 years on the money laundering count. [Source](https://www.sba.gov/article/2026/03/18/koreatown-man-arrested-charges-he-obtained-more-2-million-covid-business-loans-he-invested)

On March 23, 2026, Francesco Distefano, 29, of Addison, Illinois, was sentenced to 78 months in federal prison after pleading guilty to wire fraud for his role in a scheme to fraudulently obtain more than $3.3 million in PPP and EIDL funds under the CARES Act. Distefano and co-defendant Sargis Urumieh submitted applications for two companies containing false statements about employee counts, gross revenues, and payroll expenses; Distefano also fraudulently collected more than $37,500 in Illinois unemployment benefits while simultaneously receiving pandemic loan proceeds and continuing to work. Distefano used the fraud proceeds to purchase four luxury vehicles — a Lamborghini Huracán, Maserati Ghibli, Land Rover Evoque SE, and Porsche 911 — all of which were seized and forfeited to the government. Urumieh, who also pleaded guilty to wire fraud, is scheduled for sentencing on July 22, 2026; the case, investigated by the FBI, IRS-CI, and SBA-OIG and prosecuted in the Northern District of Illinois, illustrates that the U.S. Attorney's Office for that district is conducting a fresh review of COVID-19 fraud cases consistent with current administration enforcement priorities. [Source](https://www.sba.gov/article/2026/03/23/federal-judge-sentences-suburban-chicago-man-six-half-years-prison-33-million-covid-relief-fraud)

On March 23, 2026, Gurjeet Bath, 37, of Fresno, California, was sentenced to 14 months in federal prison and ordered to pay a $100,000 criminal fine after pleading guilty on May 27, 2025, to theft of government property. Bath, who operated two trucking businesses with family members, submitted three fraudulent PPP loan applications in 2020 and 2021, fabricating employee records and inflating wages to obtain more than $1 million in loans, of which more than $825,000 was fraudulently obtained; he used the proceeds to purchase two parcels of agricultural land in Fresno County rather than for approved payroll purposes. The case, investigated by the FBI Sacramento Field Office and SBA-OIG and prosecuted in the Eastern District of California, adds to the continuing pattern of PPP fraud sentencings in 2026 involving falsified payroll records and misappropriation of loan proceeds for personal asset acquisition. [Source](https://www.sba.gov/article/2026/03/23/fresno-man-sentenced-14-months-prison-paycheck-protection-program-loan-fraud)

On March 18, 2026, James Pavlounis, 62, of New Rochelle, New York, was sentenced to 37 months in federal prison and three years of supervised release, and ordered to pay approximately $895,180 in restitution and forfeit approximately $646,370, after pleading guilty to a 12-year scheme to defraud the Social Security Administration and to tax evasion. From January 2013 through March 2025, Pavlounis collected approximately $646,370 in Social Security disability benefits by concealing that he was actively operating and receiving income from valet parking service businesses, and separately caused his company to evade approximately $248,810 in corporate income taxes between 2018 and 2022 by using a family member as a nominal owner, paying personal expenses from business accounts, and submitting fabricated rental-expense ledgers to his tax preparer and to IRS agents. The case extends the pattern of long-running, multi-program benefit fraud enforcement already documented in this article, illustrating that concealment of self-employment income to sustain fraudulent disability benefit claims — combined with parallel tax evasion — generates substantial criminal sentences and restitution orders under federal fraud and theft-of-government-funds statutes. The investigation was conducted jointly by SSA-OIG and IRS Criminal Investigation and prosecuted in the Southern District of New York. [Source](https://oig.ssa.gov/news-releases/2026-03-18-new-rochelle-man-sentenced-to-37-months-in-prison-for-fraudulently-obtaining-social-security-benefits-and-tax-evasion/)

On March 23, 2026, William Jose Alejandro Arias Amador, 45, a Dominican national residing in Providence, Rhode Island, pleaded guilty in the District of Rhode Island to false representation of a Social Security number, health care fraud, and wire fraud. Arias Amador had used a U.S. citizen's identity and Social Security number to fraudulently apply for Medicaid and SNAP benefits. He is scheduled to be sentenced on July 8, 2026, and the case was investigated jointly by USDA-OIG, HHS-OIG, DOL-OIG, SSA-OIG, and DHS. The case extends the pattern of identity-based, multi-program benefit fraud enforcement already documented in this article — alongside the convictions of Lina Maria Orovio-Hernandez, Ricardo Santiago, and Jane Doe — illustrating that federal prosecutors continue to pursue cases in which a stolen U.S. identity is used to access health care and nutrition assistance programs simultaneously. [Source](https://oig.ssa.gov/news-releases/2026-03-23-dominican-national-pleads-guilty-to-federal-fraud-charges/)

On March 20, 2026, a 12-count indictment was unsealed in the Eastern District of California charging Richard Warren Ralston, 69, of Mesa, Arizona, with wire fraud, aggravated identity theft, and Social Security fraud. According to court documents, Ralston assumed the identity of a man born in 1948 who died in 1965, submitting a retirement benefits application to the SSA in September 2011 using the deceased man's name, birthdate, and Social Security number, and collecting benefits under that false identity for more than a decade — causing a loss of $114,285 to the SSA. If convicted on all counts, Ralston faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The case, investigated by SSA-OIG and prosecuted in the Eastern District of California, extends the pattern of long-running identity-based benefit fraud enforcement already documented in this article, illustrating that federal prosecutors continue to pursue cases in which a deceased person's identity is used to fraudulently collect Social Security retirement benefits over many years. [Source](https://oig.ssa.gov/news-releases/2026-03-20-former-placer-county-resident-charged-with-identity-theft-and-fraudulently-obtaining-more-than-110-000-in-social-security-benefits/)

On March 24, 2026, Lisa Lemoine, 38, of Bossier City, Louisiana, was charged with one count of conspiracy to commit wire fraud and agreed to plead guilty in connection with a multi-state scheme to obtain millions of dollars in fraudulent PPP loans. Lemoine allegedly conspired with Sniders Jean-Jacques, Lorne Johnson, Tanya Pierre, Ashley Spike, and others — several of whom were separately indicted in the District of Massachusetts, as previously noted in this article — to recruit ineligible borrowers, fabricate tax forms to support fraudulent applications, and collect kickbacks of up to 30 percent of loan proceeds as fees. The charge carries a maximum penalty of 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss from the scheme, whichever is greater; a plea hearing had not yet been scheduled as of the announcement. The case, prosecuted in the District of Massachusetts and investigated by IRS-CI, SBA-OIG, and the U.S. Secret Service, extends the multi-defendant PPP fraud conspiracy previously charged against Jean-Jacques and others and illustrates that the COVID-19 Fraud Enforcement Task Force continues to add new defendants to existing multi-state schemes well into 2026. [Source](https://www.sba.gov/article/2026/03/24/louisiana-woman-charged-agrees-plead-guilty-pandemic-relief-scheme)

On March 25, 2026, Ardavan Alamoutinia, 33, of Hummelstown, Pennsylvania, pleaded guilty before U.S. District Judge Juan R. Sánchez in the Eastern District of Pennsylvania to one count of conspiracy to commit wire and mail fraud, ten counts of mail fraud, one count of theft of government money, and one count of aggravated identity theft, arising from a scheme to fraudulently obtain Pandemic Unemployment Assistance funds. Alamoutinia and co-defendant Aryanah Davison, who pleaded guilty in January 2025, used stolen personally identifiable information belonging to at least 375 current or former employees of a single company to file more than 500 fraudulent PUA applications across 27 states, causing a government loss of at least $2,886,876 and converting at least $2,500,000 of the proceeds into a luxury vehicle and cryptocurrency. Alamoutinia faces a maximum of 232 years in prison and is scheduled for sentencing on July 9, 2026; the case was investigated by DOL-OIG, DHS-OIG, the U.S. Postal Inspection Service, NASA-OIG, and SSA-OIG. The case adds to the pattern of large-scale, multi-state identity-based pandemic unemployment fraud prosecutions documented in this article, and is notable for the breadth of the scheme — spanning 27 states and more than 500 fraudulent applications — and for the involvement of a co-conspirator who stole bulk employee PII from a single employer to supply the fraud ring. [Source](https://oig.ssa.gov/news-releases/2026-03-25-dauphin-county-man-pleads-guilty-to-pandemic-unemployment-assistance-scheme/)

On March 26, 2026, the U.S. Attorney's Office for the District of Massachusetts announced charges against nine individuals in a coordinated crackdown on benefit fraud schemes that exploited stolen identities — often belonging to U.S. citizens from Puerto Rico — to obtain SNAP, MassHealth, and Social Security benefits, with total alleged losses of approximately $943,197 across those programs. The defendants, most of them Dominican nationals unlawfully residing in Massachusetts and New Hampshire, are alleged to have used stolen identities to obtain government-issued identification including Massachusetts RMV credentials and U.S. passports, which were then used to apply for multiple public benefit programs simultaneously, in some cases over periods exceeding 20 years. The action is part of a broader enforcement initiative that has uncovered nearly $9 million in benefit fraud since December 2025, and extends the pattern of coordinated, multi-agency identity-based benefit fraud prosecutions in the District of Massachusetts already documented in this article. The investigation was conducted jointly by HSI New England, SSA-OIG, USDA-OIG, the State Department's Diplomatic Security Service, and HHS-OIG. [Source](https://oig.ssa.gov/news-releases/2026-03-26-nine-charged-in-benefit-fraud-crackdown/)

On March 25, 2026, Raul Fernandez Vicioso, 37, of Fitchburg, Massachusetts, pleaded guilty in federal court in Worcester to conspiracy to commit SNAP fraud, conspiracy to commit wire fraud, SNAP benefit fraud, aiding and abetting, and money laundering for his role as the lead defendant in the multi-state SNAP and Pandemic Unemployment Assistance fraud conspiracy previously noted in this article. Vicioso used stolen identities of more than 100 individuals to create 24 fraudulent SNAP "households" — all listed as residing in two single-family apartments in Providence, Rhode Island — and funneled the fraudulently obtained food benefits to stock El Primo Restaurant, a Leominster, Massachusetts establishment he operated, later wiring proceeds to individuals in Venezuela and the Dominican Republic. The same stolen identities were used to submit fraudulent PUA applications across six states, yielding over $700,000 in additional proceeds, with at least 29 identities used in PUA applications all listing the restaurant's address. Sentencing is scheduled for July 9, 2026; three alleged co-conspirators remain charged by criminal complaint. [Source](https://oig.ssa.gov/news-releases/2026-03-25-lead-defendant-in-multi-state-snap-and-pua-fraud-conspiracy-pleads-guilty/)

On March 25, 2026, a federal grand jury in the District of Nevada indicted Narda Yvonne Locklear of Las Vegas on three counts of bank fraud, two counts of theft of government money, and one count of aggravated identity theft, carrying a maximum statutory penalty of 112 years in custody. According to court documents, Locklear allegedly used a debit card issued in her deceased grandmother's name to collect more than $365,000 in Social Security Retirement Insurance Benefits payments between April 2009 and February 2026, while the SSA remained unaware of the grandmother's death; she also allegedly made false representations in her own application for Supplemental Security Income benefits and during subsequent redeterminations. A jury trial is scheduled for May 18, 2026, before U.S. District Judge Andrew P. Gordon in Las Vegas. The case, investigated by SSA-OIG and prosecuted by the U.S. Attorney's Office for the District of Nevada, extends the pattern of long-running concealment-of-death benefit fraud enforcement already documented in this article — alongside the sentencings of Richard Burke and James Pavlounis — illustrating that federal prosecutors continue to pursue cases in which a survivor exploits a deceased relative's identity and benefit accounts over many years. [Source](https://oig.ssa.gov/news-releases/2026-03-25-las-vegas-woman-indicted-for-fraudulently-obtaining-over-365-000-in-social-security-payments/)

On March 30, 2026, David Breen, 54, of Mount Pleasant, South Carolina, pleaded guilty in federal court in Worcester to one count of theft of government property for misappropriating more than $1.2 million in COVID-19 EIDL funds he obtained from the SBA on behalf of Fun Zone, the entity through which he operated Pinz, a bowling and entertainment venue in Milford, Massachusetts. After receiving approximately $1.5 million from the SBA in March 2022, Breen used the proceeds to build a personal residence and make down payments on a $111,000 truck and a $98,289 Mercedes rather than as working capital for his business. Sentencing is scheduled for June 25, 2026, before U.S. District Judge Margaret R. Guzman; the charge carries a maximum penalty of 10 years in prison, three years of supervised release, and a fine of up to $250,000. The case, investigated by Homeland Security Investigations and the SBA-OIG Boston Region and prosecuted in the District of Massachusetts, adds to the continuing pattern of EIDL misappropriation prosecutions in which loan proceeds are diverted to personal real estate and vehicle purchases rather than approved business purposes. [Source](https://www.sba.gov/article/2026/03/30/south-carolina-businessman-who-operated-bowling-entertainment-business-massachusetts-pleads-guilty)

On April 7, 2026, the SBA Office of Inspector General announced that it had facilitated the return of more than $15 million in taxpayer funds from two financial institutions — $3 million returned on March 31, 2026, and $12 million returned on April 2, 2026 — associated with over 1,000 PPP and EIDL loans identified through fraud indicators. The OIG reported that cumulative direct recoveries from financial institutions tied to potentially fraudulent pandemic-era loans have now exceeded $86.7 million, contributing to more than $2.8 billion in total investigative recoveries involving suspected COVID-19 relief program fraud. Inspector General William W. Kirk, sworn in earlier in 2026, stated that many of the recovered accounts had been frozen for years and required fraud analysis, legal review, and interagency coordination before funds could be returned. The announcement signals that the SBA OIG is pursuing administrative recovery mechanisms — distinct from criminal prosecution and False Claims Act civil litigation — as a parallel channel for recouping pandemic-era fraud proceeds at scale. [Source](https://www.sba.gov/article/2026/04/07/sba-oig-advances-fraud-recovery-efforts-facilitates-return-over-15-million-two-financial)

On April 8, 2026, Ikponmwosa Erhinmwinrose, 39, of Atlanta, Georgia, was sentenced to 17 years in federal prison after a federal jury in Denver convicted him on six counts of wire fraud, three counts of aggravated identity theft, one count of wire fraud conspiracy, and one count of conspiracy to commit money laundering; co-defendant Nyerhovwo Presley Agbure, 34, also of Atlanta, was sentenced to 57 months after pleading guilty to one count of conspiracy to commit money laundering. Erhinmwinrose, Agbure, and other conspirators applied for more than $90 million in government benefits and stole more than $7.6 million from the PPP, EIDL program, multiple state unemployment insurance programs, and tax refunds by using the stolen identities of more than 1,000 victims, creating dozens of fraudulent email accounts to impersonate real individuals and businesses, and laundering proceeds through multiple bank accounts before converting funds to cash or transferring them overseas. Two additional co-defendants await sentencing, and the investigation was conducted by TIGTA, FDIC-OIG, SBA-OIG, the U.S. Postal Inspection Service, and DOL-OIG. The case, prosecuted in the District of Colorado by the National Fraud Enforcement Division, illustrates that large-scale identity-based pandemic relief fraud rings targeting PPP, EIDL, and unemployment programs simultaneously continue to result in substantial sentences well into 2026. [Source](https://www.sba.gov/article/2026/04/08/two-sentenced-connection-fraud-ring-stole-millions-government-funds-thousands-identities)

## Sources
- [Major Fraud Against the United States on PolicyRisk](https://policyrisk.com/wiki/major-fraud-against-united-states)

## Related
- [wire fraud mail fraud](https://policyrisk.com/wiki/wire-fraud-mail-fraud)
- [false claims act](https://policyrisk.com/wiki/false-claims-act)
- [whistleblower protections](https://policyrisk.com/wiki/whistleblower-protections)
- [federal probation supervised release](https://policyrisk.com/wiki/federal-probation-supervised-release)
- [federal false statements perjury](https://policyrisk.com/wiki/federal-false-statements-perjury)
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- [counterfeiting currency law](https://policyrisk.com/wiki/counterfeiting-currency-law)

Source: PRIA, https://policyrisk.com/wiki/major-fraud-against-united-states (as of 2026-11-02).