(NewsNation) — Federal authorities have charged thousands of people for offenses related to COVID-19 fraud, and in many cases, accused fraudsters carried out elaborate schemes to obtain the money.
In Milwaukee, dozens of gang members collected pandemic unemployment benefits over the course of 18 months after submitting fraudulent claims to California and other state programs, investigators allege.
Federal prosecutors say they spent that money on guns, drugs and jewelry, and even carried out a murder-for-hire plot.
Elsewhere, a 32-year-old woman in San Diego, California, is accused of participating in a scheme to steal COVID-19 stimulus payments using the identities of homeless people in the area.
These cases represent just a handful of the more than 3,000 defendants the U.S. Justice Department has charged so far. As of this week, the DOJ says it has seized over $1.4 billion in pandemic relief funds.
Milwaukee murder-for-hire
Earlier this year, a federal grand jury indicted 30 individuals involved with a Milwaukee street gang known as the Wild 100s after they allegedly secured millions of dollars by defrauding the government.
Prosecutors say the group worked together to submit phony unemployment claims to receive pandemic benefits from California and other states. Those funds were sent by mail to Wisconsin on pre-loaded debit cards, which the defendants used to withdraw cash from ATMs, according to the indictment.
The money was spent on guns, drugs and jewelry, as well as a murder-for-hire plot, authorities claim.
Two men are accused of arranging and executing a murder in the spring of 2021 using funds they fraudulently obtained. If convicted, both men could face life in prison.
Most of those involved have been charged with mail fraud conspiracy and other mail fraud offenses which each carry a maximum prison sentence of 20 years.
Exploiting the homeless
A San Diego woman approached homeless people throughout Southern California and then used their personal information to apply for pandemic stimulus payments which she later kept for herself, according to a federal indictment unsealed last month.
After obtaining their info, Alexandra Crystal McFarland told her victims they could expect an Economic Impact Payment (EIP) in the mail. Instead, she reportedly directed that money to a bank account she controlled.
In other cases, McFarland claimed she would assist with the application in exchange for a cut of the funds but then kept more than promised, and sometimes the entire amount. The 32-year-old used the money to buy thousands of dollars in jewelry and furniture and also to cover part of a $60,000 down payment for a Mercedes Benz G-wagon, the indictment said.
Meanwhile, McFarland’s husband, Demetrius Montre McFarland — who was already in prison for attempted murder — provided his wife with personal info about fellow detainees, which she also used to apply for pandemic relief money, per court documents.
The married couple was indicted in June on conspiracy and money laundering charges.
Prison unemployment scheme
From March 2020 through December, nine inmates in the South Carolina Department of Corrections, along with six of their friends and relatives, allegedly carried out a COVID-19 unemployment fraud scheme totaling $5 million.
The defendants acquired social security numbers and dates of birth from other inmates and used that information to obtain pandemic unemployment benefits, prosecutors allege. Some inmates were unaware that their information was being used, while others agreed to participate in exchange for a portion of the proceeds.
Prosecutors say the inmates got other personal info through extortion. Using contraband cell phones, they lured people into sending nude photos. Then, they contacted victims posing as law enforcement and got them to send money or personal information like photos of social security cards.
The friends and relatives working on the outside later collected unemployment benefits in the names of the extortion victims, authorities allege. That money was then transferred to the inmates via mobile apps like Zelle and Venmo.
Most of the defendants face multiple counts of wire fraud and one count of conspiracy to commit wire fraud. Each alleged count carries up to 30 years in prison.
