Government Programs FAQs

What are red flags of grant fraud?

Government grant fraud is a serious offense that involves more than just making a one-time mistake with funding. Grant fraud is an intentional, knowing attempt to mislead grant administrators, mis-spend government funding, or provide false information about how grant money is being used. Some of the warning signs that government grant fraud may be taking place include:

• Excessive spending in one budget category
• Shoddy record-keeping
• Disregard for the purposes of the grant
• Obfuscation of payments
• Charging unrelated expenses using grant funds
• Conducting unrelated research with grant funds
• Attempts to “spend down” funds before the end of a deadline
• Continuing to spend grant funds after a project is completed, or award timeline is finished
• Conflicts of interest and other suspicious practices, such as the hiring of family members or purchasing key equipment from parties with a financial interest in the grant

What are the possible consequences of grant fraud?

Grant fraud penalties can be civil as well as criminal. Civil penalties include fines, fees, and penalties; recovery of administrative funds by a lawsuit; and becoming ineligible for future funding.

Reporting grant fraud, on the other hand, may have a positive consequence for those who help reveal it. Grant fraud whistleblowers who are able to file a qui tam lawsuit with their evidence may be eligible to receive anywhere from 15-30% of the total award in the event of a successful case. They may also be able to receive protections against employer retaliation.

What is commingling of grant funds?

One common example of research grant fraud is the commingling of grant funds. Government grant moneys may be clearly accounted for by the institution that receives funding. One agency’s grant cannot be used to support work being done in an outside area, or even in an outside project conducted by the same team. Each award must be accounted for individually, on a program-by-program or project-by-project basis. In the most protected cases, some grant funds must be kept in a separate trust account.

What is a stacking grant?

Stacking grants is not necessary proof of fraud, as some grants may be legally “stacked” in order to fully fund a project. Stacking grants is the act of applying for and utilizing multiple funding sources to support one project.

Many grants include maximum percentages that they can contribute to the total cost. For instance, if one government grant stipulates that it can cover up to 75% of total project expenses, project managers should not anticipate covering the remaining 25% with other government funding. Exceptions may arise when applying for local vs. federal funding.

Additionally, some grants explicitly state that they must be the sole source of funding for the project. In these instances, stacking grants would be considered an example of grant fraud.

What is double dipping in grants?

Double dipping is another way that stacking grants can be considered fraud. Double dipping often occurs when an agency seeks to turn a profit off of a project, and not merely receive support through grant funds. Two funding sources cannot be used to cover the same expense. For instance, if one grant is used to cover the cost of a new hire, a second stacked grant cannot also be used for that same purpose.

Who do I call about federal grant fraud?

Becoming a federal grant fraud whistleblower ensures that important research is not impacted by profit motive. It protects taxpayer money as well as research results. To launch a grant fraud investigation, report your suspicions to a qualified qui tam law firm. The law offices of Tycko & Zavareei LLP can advise you in a confidential consultation if you may have a case that can qualify you for whistleblower protections and a possible reward.

How were COVID-19 relief funds misappropriated?

In addition to its many health risks, COVID-19 brought with it a period of financial instability, business disruption, and general uncertainty – perfect conditions for con artists worldwide. Over an estimated $500 billion may have been stolen from COVID-19 relief funds distributed by the federal government. Experts assess that this number includes approximately 10% percent of the $800 billion earmarked for the Paycheck Protection Program, another $80 billion from COVID disaster relief, as well as anywhere from $90 billion to $400 billion from COVID unemployment payments, at least half of which may have disappeared internationally.

COVID-19 relief fraud diverted resources away from people who needed them most. Instead, funds went to finances like luxury cars, clothes, and hotel bills for people who ended up profiting off of the panic. Sources claim insider influence, a lack of government oversight, as well as Congressional direction to hold lenders “harmless for borrowers’ failure to comply with program criteria” in order to rush funding may have contributed to the massive loss.

What is PPP loan fraud?

PPP loan fraud refers to the theft of funds distributed through the COVID-19 relief project the Paycheck Protection Program. Under the PPP loan parameters, banks were authorized to make government-backed loans to small businesses in order to keep employees paid and businesses afloat during periods of shutdown. The loans were set to be forgiven if funds were spent on legitimate businesses expenses. Nearly 10 million PPP loans have already been forgiven by the federal government.

Some ways that PPP loan fraud may have occurred include:

• False certification of eligibility: If businesses falsely claimed that they were eligible for PPP loans, they may have taken thousands or millions of dollars away from the program in now-forgiven loans. Worse, because the program was shut down when funds ran out, eligible business owners were cheated out of the opportunity to receive much-needed funds when non-eligible businesses cut in line.
• False information: Plenty of PPP loans were claimed by people who did not actually own businesses or have employees. Fake or random phone numbers were used on applications, as well as addresses where businesses were never registered. Some scam artists claimed that they were supporting payrolls of dozens employees, and simply took the money and disappeared. A lack of verification at the time made PPP loan fraud a once-in-a-generation opportunity for the unscrupulous.
• Misuse of funds: PPP loan funding that went to those who did not own businesses or owned smaller businesses than what was reported may have also been misspent on personal or luxury goods and services.
• Double-dipping: When a business uses multiple loans to cover the same expense, such as a PPP loan and an Economic Injury Disaster Loan (EIDL), it may be an example of double-dipping.

What are some PPP loan fraud red flags?

Many PPP loan fraud red flags included identity theft, such as stolen Social Security numbers or birth dates in order to apply for funding. Other instances involved missing tax forms, wrong addresses entered on PPP application forms, or the misreporting of crucial information, such as number of employees or kind of business conducted.

How do I report PPP loan fraud?

Reporting PPP loan fraud can help hold deceitful companies and individuals accountable. PPP loan fraud lawyers can connect you to investigators with the Small Business Administration and Department of Justice to present your evidence, and possibly qualify for a whistleblower reward. Cases involving false claims made to the federal government are prosecutable under the federal False Claims Act, which allows whistleblowers the opportunity to recover anywhere from 15-30% of recovered money from a successful case.

If you have information about misused or wrongfully claimed COVID-19 relief funds, report it today. Doing so can net you not only a financial reward, but also federal protection against employer retaliation.

Who investigates PPP fraud?

Because of the scope and scale of COVID-19 relief fraud, PPP loan fraud investigations are currently conducted by several different government agencies. PPP loan fraud investigation may fall under the purview of the FBI, SBA, DOJ, or IRS.

What constitutes education fraud?

At its best, education is a doorway towards advancement and a true calling for those with a love of learning. At its worst, the field of education can act as a for-profit mill, churning through students and leaving them with a lifetime of debt and shallow field of knowledge. The difference often comes down to fraudulent practices by administrators and teachers.

Educational institutions receive billions of dollars each year in public funding. Public colleges and universities receive at least 34% of total revenue through federal and state assistance, and the College Board estimates that undergraduate and graduate students received $234.6 billion in government-backed financial aid in the 2021-22 academic year. When those funds are misused, misreported, or fraudulent recruiting or certification practices are employed, education fraud whistleblowers may be able to report the situation for a financial reward.

What are the types of education fraud?

Fraud in education takes many forms, and are not limited to the following examples:

• Online school fraud: Non-accredited institutions may commit education fraud by failing to provide certain facilities or quality of education, as well as by misrepresenting graduation rates, job placement rates, or offering other false facts to boost enrollment and receipt of federal or state funds.
• Kickbacks: The Higher Education Act prohibits schools that receive federal funding from using recruiters to boost student enrollment. The offering or payment of commissions, bonuses, referral fees, or other incentives are also prohibited when they are linked to student enrollment rates.
• Falsification of student records: Administrators may attempt to obtain federal student aid funding for ineligible students by falsifying student academic records, or by claiming certain students meet grant program requirements.
• Coercive recruitment practices, or violations of the Department of Education’s Incentive Compensation Ban.

What is student loan fraud?

An education fraud attorney is the first line of defense for reporting student loan fraud. Student loan fraud most often occurs when administrators inflate student academic reports to qualify them for further aid, mis-certify students who do not qualify for government funds, recruit students in order to inflate school enrollment, or fill out loan applications or financial aid forms on behalf of prospective students. Student loan fraud takes advantage of people seeking to better themselves through higher education by saddling them with mountains of debt in exchange for what is often lower standards of learning. It also drains the pool of taxpayer-funding resources available for everyone. To report student loan fraud, contact an education fraud attorney to see if you may be able to blow the whistle.

What is the most common type of fraud in higher education?

According to a study from the Association of Certified Fraud Examiners (ACFE), the most common types of education fraud are:

• Billing schemes (34.8%)
• Corruption (31.8%)
• Skimming of allocated funds (25%)
• Cash on hand theft (17.4%)
• Reimbursement for fraudulent expenses (15.9%)

School fraud is most often committed by the creation and alteration of physical documents. Fraud may arise from inside a school’s administration, like in one Georgetown University case where an administrator improperly paid herself $390,000 from an account where she had signature authority for a university-sponsored conference. Diversion of funds may also occur within departments, like the inappropriate use of grant funds for personal expenses, pressure to issue inflated grades, the creation of fictitious chair positions or companies, and the use of students to complete outside work assignments as “term papers.”

What are examples of misappropriation of funds in schools?

Like any large organization, schools are usually at risk of hiring corrupt administrators. Some common examples of misappropriation of school funding include collecting reimbursements for non-education expenses. Athletic programsparticularly fall under scrutiny because of their outsize risk of travel reimbursements, uniform expenses, equipment costs, and more. Facilities maintenance is another common area with fraudulent credit card charges and false certifications of work completed. Even K-12 education can be at risk of misapropriation of funds when principals or other office personnel wrongfully use education funds for personal gain.

How do I report student loan fraud?

Reporting student loan fraud can save young people from a lifetime of debt, and ensure that they get the education they pay for. A student loan fraud attorney can help you bring your information to the proper channels in the Department of Education and/or Department of Justice to file your whistleblower complaint.

What is crop insurance?

The Federal Crop Insurance Program is a vital reinsurance institution that insulates the agricultural industry from shocks and losses. Under the Federal Crop Insurance Program, private insurers who offer crop insurance coverage can be reimbursed for qualified costs by the federal government. This helps lower the price of crop insurance for farmers, making it more affordable to protect against seasonal loss or natural disaster.

Crop insurance is a tiered system. It is administered by the Federal Crop Insurance Corporation (FCIC) and the Risk Management Agency (RMA), which fall under the umbrella of the US Department of Agriculture. Private insurers offer USDA-standardized crop loss coverage to farmers, who pay premiums that may be subsidized by the FCIC. When those farmers experience a covered loss, their insurance policy holder pays them the agreed-upon rate, much like auto or home insurance. However, unlike many other private or commercial insurances, the FCIC will then reimburse the private insurer for what they paid to the farmer.

What is crop insurance fraud?

Crop insurance is a public good meant to stabilize the American farming economy. However, because of its many complexities and interventions, it is also an area rife with fraud. A farmer may lie about the extent of the damage to crops, the location or area of the field, or even double-dip and claim crop insurance for a harvest that was actually sold. Additionally, a crop insurance company may backdate policies, offer insurance to farmers who are not qualified for federal reimbursement, make or certify payments that are not covered by FCIC standards, forge signatures, keep claims for corporate profit, and more. Federal crop insurance fraud is limited only by the scope of both farmers’ and insurance companies’ imaginations.

How do I report suspected crop insurance fraud?

To report crop insurance fraud, you may call the USDA’s toll-free hotline at 1-800-424-9121. You may also first contact a crop insurance fraud attorney to report your suspicions. The experts at Tycko & Zavareei LLP can advise you about whether or not your information may qualify you for a whistleblower payout under the False Claims Act. However, once a tip has already been reported, it becomes ineligible. For this reason it is advisable to speak with an attorney right away once you suspect crop insurance fraud.

Who investigates crop insurance fraud?

Crop insurance fraud is investigated by the USDA and Office of the Inspector General. Cases may also be brought under the False Claims Act, and settled under qui tam law for a whistleblower reward.