Final member of $17 million COVID-19 fraud scheme sentenced

A federal judge on Tuesday sentenced Frederick Smith of Cordova, Tenn., to nearly two years in prison for his role in the scheme. The 56-year-old defendant worked with seven others to defraud COVID-19 disaster relief programs, including the Paycheck Protection Program, of over $17 million. The defendants obtained the funds by submitting false and fraudulent loan applications prepared by 49-year-old Rodrick Flowers and other people involved in the scheme. They filed the applications on behalf of businesses and entities they owned while they intentionally misrepresented their total number of employees, as well as their total revenues, and payrolls. The defendants used the loan funds for unauthorized purposes, according to government documents.

What else is the government doing to combat COVID-19 fraud? The Department of Justice and the U.S. Department of Health and Human Services last month pledged to convene the DOJ-HHS False Claims Act Working Group to combat healthcare fraud. The group investigates healthcare fraud and false claims. Earlier this month, authorities charged three people in Georgia with laundering nearly $2 million in COVID-19 relief funds.

Dig deeper: Read Christina Grube’s report about the government charging more than 300 people in connection with healthcare fraud schemes.