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On the same day the COVID-19 public health emergencies ended in Illinois, the state Senate sent to the governor’s desk a bill that would extend the statute of limitations for theft and fraud prosecutions connected to COVID-19-related relief programs.
The bill would give state prosecutors an extension of 10 years beyond the existing statute of limitations to bring cases against individuals suspected of defrauding pandemic-era programs like the Paycheck Protection Program, the COVID-19 Economic Injury Disaster Loan program and unemployment benefit programs.
The bill’s backers cite both the complexity of the cases and the potential scale of wrongdoing.
“These cases are very labor intensive. On average, subpoenas take around 60 days to return per round and sometimes we have multiple rounds of subpoenas so they needed that time,” state Rep. Fred Crespo, a Hoffman Estates Democrat who sponsored the bill, said.
The legislation was introduced because the three-year statute of limitations was expiring on a number of cases being investigated by the Illinois attorney general’s office, a spokeswoman for the AG’s office said.
“These investigations are complex and frequently involve partnering with other local, state and federal law enforcement agencies,” spokeswoman April McLaren said in an email.
The bill passed through both chambers of the General Assembly without any no votes, and Gov. J.B. Pritzker’s office said he plans to sign it “in the coming months,” a spokesman said.
“Governor Pritzker believes that individuals who took advantage of a once in a generation pandemic to prey upon those who most needed resources to survive should be held fully accountable,” Pritzker spokesman Alex Gough said.
The bill would affect only state investigations into COVID-19 fraud, and puts the state’s time limit for prosecutions closer to federal rules after Congress last year extended the statute of limitations on pandemic relief fraud to 10 years after the alleged offense was committed.
The state’s existing statute of limitations on fraud cases varies based on multiple factors including the dollar amount of the alleged theft.
The scope of fraud involving COVID-19 stimulus money through the federal Coronavirus Aid, Relief, and Economic Security Act is likely massive, said FBI Special Agent David Nanz, who is in charge of the bureau’s Springfield office.
“This is the largest theft of money in the history of the world,” Nanz said. “There is nothing that comes close when you look at all of the programs under the CARES Act — whether it be the unemployment insurance program, the PPP program, the Economic Injury Disaster Loan program. The total losses exceed — through fraud — more money than we have ever seen before and it’s something that we are going to be paying for a long time because a lot of this was borrowed money.”
An Illinois Department of Employment Security audit released last June stated that nearly $2 billion in federal unemployment money intended to help those out of work because of the pandemic had been stolen. Earlier this year, Cook County’s inspector general said 17 county employees received COVID-19 relief loans for businesses that did not exist or spent their COVID-19 loan on personal expenses.
State and federal investigations into such cases often overlap, said Rebecca Cramblit, public affairs officer at the FBI Springfield office. For example, “unemployment funds come from the federal government but are dispersed through state agencies, therefore both federal and state courts would have jurisdiction,” she said in an email.
“The FBI has worked with the Illinois Attorney General’s Office regarding these cases, and they are investigating several cases regarding COVID-19 relief fraud and unemployment fraud,” Cramblit said. “We work jointly with our state and local partners to leverage each agency or department’s resources to address both state and federal offenses.”
Crespo said one of the reasons COVID-19-relief investigations take so long is that the money was handed out quickly and often without enough oversight.
“I think these agencies were reacting to what’s going on and what they needed to do and get the assistance out the door,” he said. “And doing that in haste caused a lot of problems where we didn’t have checks and balances.”
Nanz says the FBI’s Springfield office — which covers 84 of the 102 counties in the state — has opened “more than 300″ investigations into fraud relating to the COVID-19 programs, with new probes initiated every week.
A spokesperson for the FBI’s Chicago office said “a single case may have 150 subjects, or a single case may represent 1,500 separate, fraudulent PPP loan applications. A conservative estimate would identify well over 1,500 fraudulent acts under investigation in northern Illinois.”
Chicago Tribune’s Joe Mahr contributed.
hsanders@chicagotribune.com
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