East Central Reporter

More than 1,000 federal COVID-19 relief loans meant for struggling businesses were obtained by city of Chicago employees, raising concerns of potential fraud, according to a recent report by the city's Inspector General, Deborah Witzburg. While some of the loans were obtained legitimately, a significant number showed indicators of fraudulent activity.

The investigation conducted by the Chicago City Hall Inspector General's office examined over 350,000 federal COVID-19 loans approved in the Chicago area. Among these loans, more than 1,000 were found to have been acquired by city employees through the Paycheck Protection Program and Economic Injury Disaster Loan Program.

One case that has already resulted in disciplinary action involves a worker from the Streets and Sanitation Department. The individual allegedly falsified tax records and reported fake business income for a hair salon. The investigation also includes members of the police and fire departments.

Inspector General Witzburg emphasized that the investigation would prioritize individuals in positions of elevated public trust and would be pursued either administratively or criminally. This comes in light of a nationwide trend of COVID-19 relief fraud, with an estimated 17 percent of the $1.2 trillion distributed in relief programs obtained fraudulently, according to a federal watchdog.

The issue of fraud among Chicago municipal employees has drawn criticism from Representative Miller, who highlighted the need for increased oversight and competent leadership from state agencies. "Chicago corruption and fraud continues to impact our state, and Democrats could care less," stated Representative Miller.

The jurisdiction of the Inspector General's office extends to all city employees, elected and appointed officials, as well as city contractors and vendors. Other local watchdogs, including inspectors general overseeing Cook County, the Chicago Housing Authority, and Chicago Public Schools, have also been investigating potential fraud and violations of personnel rules.

Recent reports from the Cook County Inspector General revealed instances of federal fraud within the county's Water Reclamation District and health system. In one case, an employee at the MWRD office misused a $20,000 loan intended for a hazardous waste freight transportation business for unauthorized purchases. Another employee obtained multiple loans totaling $21,000 and used them for personal gain, leading to their resignation. In total, six Cook County employees resigned after being investigated for fraudulently obtaining PPP funds exceeding $200,000, while another employee misused funds on personal expenses and faces termination.

These investigations follow the uncovering of fraud among over 170 state employees involved in defrauding the federal Paycheck Protection Program. These investigations are still ongoing and are expected to continue in the coming months.

Earlier this year, a Performance Audit Report of the Illinois Department of Employment Security (IDES) revealed that Illinois overpaid $5.2 billion in unemployment benefits during the first 18 months of the COVID-19 pandemic. Shockingly, this included $6 million paid to deceased individuals and $40.5 million in unemployment checks to incarcerated individuals. The full extent of the overpayments and potential fraud is yet to be determined as investigations continue.

The investigations into COVID relief fraud among Chicago municipal employees highlight the need for enhanced oversight and accountability measures. As the city and state work to recover from the pandemic, it is crucial to ensure that relief funds are allocated appropriately and reach those who truly need them.

Click this link to access more information: https://repcmiller.com/2023/11/17/chicago-municipal-employees-being-investigated-for-covid-relief-fraud/