Crisis, Mismanagement, and Opportunity: Understanding Grant Fraud

Welcome to the March 2026 edition of our newsletter!  In this issue, we’ll examine different types of grant fraud, instances of which have risen in the past half decade as government spending increased following the coronavirus pandemic.

Emergency Relief Becomes Fraud: How Criminals Exploit Crises

In the past, we’ve addressed fraud among those who applied for pandemic-era loans meant to keep businesses operating during the shutdown.  A corollary to that, with potentially longer-lasting implications, is the fraud used to obtain grants and government contracts during a time of crisis.  In the wake of the pandemic, several people were charged with defrauding state governments, both in the United States and elsewhere, concerning orders for personal protective equipment.  More recently, fraudsters traveled to Minnesota to “recruit Medicaid beneficiaries at homeless shelters and Section 8 housing facilities. The defendants signed those individuals up for HSS [Housing Stabilization Services] and then billed the program for services that were not provided. When asked to provide supporting documentation for their claims, [Anthony] Jefferson and [Lester] Brown fabricated e-mails discussing their purported ‘clients’ and used ChatGPT to create fake client notes. In total, from February 2022 through June 2025, Jefferson and Brown stole approximately $3.5 million from HSS for services they fraudulently claimed to have provided to approximately 230 Medicaid beneficiaries,” a statement issued after the defendants entered guilty pleas said in part.

The practical implications are clear if your client is a government agency, or an independent group which administers funds for a government agency: What you don’t know about vendors and other providers can prove very damaging if something negative is only discovered after it’s too late. Thorough vetting of providers, and of those considered for large program funding and other grants, is an essential tool for making sure programs runs smoothly and the funding assists those it is truly meant to help.