Robust anti-fraud unit probing federal coronavirus relief payments

MORGANTOWN, W.Va. — An investigation of up to 16,000 loans taken out during the COVID-19 pandemic is about to be undertaken by the U.S. Attorney’s Office of the Northern District of West Virginia. U.S. Attorney Bill Ihlenfeld announced that his office is developing a team of investigators and working with county prosecutors to look at loans that vary from personal loans to Paycheck Protection Program loans.

“Individual loans, business loans, and these might be the Paycheck Protection Program loans, or the Economic Injury Disaster loans,” said Ilhenfeld on the type of fraud being investigated by his office. “Idle loans” and other types of pandemic relief were rolled out due to COVID, he said.

The loans are being investigated as part of a nationwide investigation of over $5 billion in potential loan fraud that occurred during the COVID-19 pandemic. For Ihlenfeld, his office’s investigation will consists of thousands of hours worth of information received by officials in his office including a full time analyst who will file the forensic auditing of questionable loans. County prosecutors will be offering assistance by pointing out familiar names that are on the list of loans under investigation.

“I’ve received some good tips from county prosecutors about people that they see on the list,” said Ihlenfeld on WAJR’s Talk of the Town. “And they say, “You know, wait a second, I’ve prosecuted that guy three different times, and how is it that he claims to have had an income of over $100,000 during the pandemic,” he said.

While still early in the initial loan fraud investigation, Ihlenfeld states that the U.S. Attorney’s Office of the Northern District of West Virginia has already indicted several residents and business owners found guilty of fraud. The amount of fraud has varied from individuals who exaggerated their need for federal funds to those who had no businesses in place but were accepting COVID relief funds regardless.

“We recently had someone who pleaded guilty who did just that; he did have a business, but he lied about the number of employees and the amount of revenue for that business, and as a result, he was able to receive a larger loan,” said Ihelndeld, giving a recent example of an indictment from his office.

The investigation into the nearly 16,000 loans is expected to take place throughout 2023. Ihlenfeld states that the forensic audit of the loans and details involving who they were given to and potential charges will take months to fully develop. With the various sizes of fraud being looked into and the amount of manpower required to fully investigate such cases, indictments are expected to be released steadily as more information is discovered.

If you’ve obtained a loan for $20,000, that penalty is going to be different than if you obtained a fraudulent loan for $20,000 versus one for $200,000 versus $2 million,” said Ihelfeld. “And we’ve got people in these various categories,” he said.