Covid Fraudsters Using Robinhood, TD Ameritrade in Laundering of $100 Million in Stolen Funds

Photo: AARP.org

Photo: AARP.org

It’s no secret that techy swindlers have found a plethora of ways to cash in on the COVID crisis, including using stolen identities to launder $100 million in Covid relief funds.

Authorities say since the CARES Act passed last March, cons have been reaping a multitude of benefits from funds meant to help small businesses and people suffering during the pandemic. Dumping $100 million of the fraudulently acquired funds into investment accounts with stolen names using platforms such as TD Ameritrade, Robinhood, E Trade, Fidelity–and more– is just one avenue.

What’s more: Federal investigators recently charged nearly 500 criminals who illegally collected over half a billion dollars in the past 12 months. And there are reports of overall fraud going into the billions of dollars

“We’re very concerned about misuse of funds, [and] we’re concerned whether we can identify all fraudulent activity,” said Justice Department’s Inspector General Michael Horowitz last year. “One of the things we want to do, and be effective in, is identifying misuse of funds, weaknesses in systems so that they can be improved and future potential fraud can be prevented.”

The three small business programs launched from the CARES Act–the Economic Injury Disaster Loan (EIDL), the Employee Retention Credit, and the Paycheck Protection Program (PPP)– have been littered with problems from the start. Creating phony companies and falsifying the number of employees to maximize loan eligibility are just a couple of the recurring themes seen in this massive fraud scheme. 

Many of these criminals aren’t investing with Robinhood. They’re upgrading.

“Criminals have tried funding their lavish lifestyles with money intended to provide Americans relief during one of the most difficult times in recent history,” said Jim Lee, Chief of IRS Criminal Investigation, late last week. “We have investigated cases of criminals flaunting stolen money to buy fancy cars, boats and pay for luxury apartments while families and businesses struggle to make ends meet.

“IRS-CI special agents have done an extraordinary job identifying millions in stolen money and our work is far from over,” he continued. “We will not cease until every fraudulently obtained dollar is accounted for and the individuals behind the schemes are prosecuted to the fullest extent of the law.”

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