Brian Benczkowski, head of the Justice Department’s criminal division, plans to leave the agency in July.
Photo: joshua roberts/ReutersFederal prosecutors are looking at false statements made by applicants for coronavirus relief loans. They also are seeing a rise in cyberattacks on the health-care industry, an official said Wednesday.
Those are some of the coronavirus-related enforcement issues facing the U.S. Department of Justice, according to criminal division chief Brian Benczkowski.
“We’re as busy as we’ve ever been,” Mr. Benczkowski said during an online event hosted by the American Bar Association. “Despite the limitations that Covid-19 has placed on our ability to move forward in some white-collar cases, this isn’t downtime—it’s just ‘different time.’”
Mr. Benczkowski, who plans to leave the Justice Department in July, said the criminal division was drawing on lessons it learned from the 2008-09 financial crisis to search for fraud among applicants to government relief programs.
In March, Congress enacted the Paycheck Protection Program, which provides forgivable government loans to companies that use at least 60% of the funds to cover payroll. Prosecutors so far have brought eight cases charging nine defendants in connection with PPP loan application fraud, according to Mr. Benczkowski.
The cases have involved simple, false statements on loan applications related to payroll expense and employee numbers, or the submission of documents by businesses that don’t exist or by individuals claiming to own a company that isn’t theirs, he said. “I can assure you there will be many more prosecutions that are coming.”
The health-care industry in particular has been affected by pandemic-related criminal activity. “We’ve seen cyberattacks on health care, pharmaceutical and research organizations in order to steal valuable research on coronavirus vaccines and treatments,” Mr. Benczkowski said.
Regulatory agencies also have made efforts to target coronavirus-related fraud and misconduct. The U.S. Securities and Exchange Commission, for example, has focused on suspending trading in the securities of some companies because of potentially misleading claims about treatments, vaccines or access to personal protective equipment.
Steven Peikin, a co-director of enforcement for the SEC who also spoke on the panel, said the regulator also was looking at whether market disruptions stemming from the pandemic were creating opportunities for misconduct.
The virus has slowed or halted some types of investigative activity, according to officials. For example, prosecutors and regulators often prefer to conduct sensitive interviews with key witnesses and the subjects of investigations in-person, where they can more easily read body language and display documents and other evidence.
However, Mr. Peikin said the SEC had been successful in taking testimony remotely using web conferencing technology.
In some cases, individuals have refused to give testimony remotely, Mr. Peikin said. But the SEC is prepared to push forward and recommend an enforcement action even without such testimony when able, he said.
“To the extent we’re looking at having claims expire because of the passage of the statute of limitations, I think as an enforcement division we’re not going to allow that to happen,” Mr. Peikin said.
Write to Dylan Tokar at dylan.tokar@wsj.com
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