COVID fraudsters netted over $400M in stolen aid in NY. What they spent it on.
As pandemic-ravaged New Yorkers lined up at food pantries, one Manhattan fraudster used stolen coronavirus relief funds for an $89,000 hotel stay in Florida, blowing $63,000 on room service and dining out.
Another New York schemer used $4 million in bogus coronavirus loans to buy, in part, a motel on a world-class trout fishing lake in Missouri and a European-style castle in New Jersey. Other thieves used COVID-19 aid to buy at least 14 luxury vehicles, including Bentleys, a Rolls Royce and a Ferrari, court records show.
Those are among the findings of the USA TODAY Network investigation of fraud and government waste linked to the COVID-19 pandemic response in New York.
The monthslong probe revealed at least $400 million in taxpayer-supported coronavirus aid and unemployment benefits intended for New Yorkers was stolen.
While authorities raced to claw back as many of the tax dollars and ill-gotten luxury goods as possible, experts and records suggested it represented just a slice of the true coronavirus fraud toll in New York, which is expected to cost billions of dollars.
Coronavirus fraud crackdown gaining momentum?
Despite government watchdogs raising concerns that billions of dollars in COVID-19 fraud could go unpunished, top federal prosecutors in New York asserted efforts to catch fraudsters are gaining momentum.
“To the extent that the criminals get better doing this, we get better, too,” Carla Freedman, U.S. Attorney for the Northern District of New York, said.
The Northern District, for example, has about 50 coronavirus fraud investigations active across large swaths of upstate. It previously filed charges in 21 cases, spanning more than $17 million in actual government losses, of which about $12 million is being recouped through seized assets and court orders.
In other words, the feds are closing in on more coronavirus scammers and fraudsters. Indeed, investigations are piling up so quickly in New York and across the nation that federal lawmakers and President Joe Biden in August extended the statute of limitations on the cases to 10 years.
The ticking clock on coronavirus fraud
Still, the brazen way some individuals burned through stolen coronavirus loans and other aid thus far underscored the challenges ahead in recouping wasted tax dollars.
One coronavirus loan scheme fueled a $270,000 shopping spree, including:
$40,000 on a 18-carat gold Rolex watch.
$50,000 in furnishings for a luxury condominium.
$37,000 in designer goods at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin and Yves Saint Laurent.
Another case accusing a banking executive of coronavirus loan fraud featured a striking list of alleged illegal spending.
Among the spending connected to the case:
$10 million on a villa in the Dominican Republic.
$3.5 million on a mansion located in Franklin Lakes, New Jersey, and a chartered jet service.
Luxury vehicles, including a 2018 Porsche 911 Turbo, a 2017 Ferrari 488 Spider, a 2017 Bentley Continental GT, a BMW 750, and a 1962 Mercedes Benz 190.
While some prosecutions have already seized piles of cash, real estate, and other luxury items, the government could see less robust returns as investigations span coming months, if not years.
“If it takes a long time to prosecute, the money may be gone,” said U.S. Attorney Trini Ross, of New York’s Western District based in Buffalo.
Why authorities tout COVID fraud cases
Beyond the push for recouping stolen pandemic funds, authorities have been urging judges to impose lengthy prison sentences for these kinds of cases, which have already topped five to seven years in several early cases across upstate.
Syracuse-based federal prosecutor Freedman described the sentences as crucial after some fraudsters boasted via criminal networks of getting away with coronavirus fraud, flashing their cash and luxury cars in online videos.
Some of the individuals caught so far, Freedman added, will now have plenty of time in the coming years “sitting in a federal prison cell to think about whether it was worth it.”
This article originally appeared on New York State Team: Bentleys, castles: How fraudsters spent $400M in stolen NY COVID aid
