The Insane Crip Gang was a fearsome presence on Long Island in New York, blamed for two dozen attempted murders, at least three successful slayings and a host of other crimes.
And in recent years, the group started funding its activities in a most unusual way: Stealing pandemic benefits.
The gang worked up a fraud manual to help members fabricate businesses, submit pandemic loan applications to the Small Business Administration, defeat the screening software meant to weed out bogus claims and collect the cash.
Gang members also rushed to apply for unemployment benefits, with California’s notoriously frail program a particular target.
During a single month in 2020 Insane Crip Gang (ICG) members managed to bilk the state out of $200,000 in bogus unemployment payouts.
“They used this money to fund the gang, buy guns and live a lavish lifestyle,” said Carolyn Pokorny, first assistant U.S. attorney for the Eastern District of New York, in announcing the charges this spring.
The ICG isn’t alone.
From Brooklyn’s Woo gang to the Step or Die gang in Shreveport, federal authorities say street gangs have figured out what Russian and Chinese hackers, Nigerian scammers and regular old American grifters also figured out during the pandemic: The government was giving out money with little regard to who was asking.
In those cases, authorities also say taxpayers also ended up paying to fuel the gangs’ activities.
There were three big pandemic assistance programs — two of which involved small business lending and the enhanced unemployment benefits. Authorities are still struggling to put a dollar figure on the fraud, but have indicated it runs into the hundreds of billions of dollars.
Those relief programs are over. But the gangs have moved on to other government programs such as food stamps, or the regular unemployment insurance program, said Haywood Talcove, CEO of government at LexisNexis Risk Solutions.
The dollars may be slightly smaller now than in the pandemic era, but the cash still flows.
“The benefit programs are providing the capital that these criminal organizations use to invest in their business,” Mr. Talcove said.
Sometimes the gangs spend the money on conspicuous consumption, like most other white-collar criminals. That means vacations, real estate and particularly flashy cars.
But Mr. Talcove said sometimes it also means the seed money to engage in sex trafficking, to load up on more firepower or to buy a shipment of drugs to sell on the street.
Prosecutors say the ICG was involved with trying to defraud the Small Business Administration, which doled out more than $1.4 trillion in grants and loans to keep businesses afloat, and to defraud the unemployment system. Gang members walked away with more than $200,000 from California’s unemployment program.
The indictment also covers murders, attempted murders and firearms offenses.
“This gang celebrated its violence on social media, using that same social media as a recruiting tool, and financed its activities by systematically stealing from government benefit programs designed to aid the unemployed and those adversely impacted by COVID,” said Anne T. Donnelly, district attorney in Nassau County.
Flaunting on social media is a common thread through the gang cases.
Members of Step or Die, the Louisiana gang, posted photos of themselves fanning out cash and clutching a firearm.
Authorities say 24 gang members filed more than 40 bogus pandemic business loan applications worth $2.2 million, and got paid out on about $600,000 of that.
In Brooklyn, members of the Woo gang posted a music video to YouTube where they bragged about stealing pandemic unemployment benefits.
Prosecutors say they used more than 800 stolen identities and filed nearly 1,000 unemployment claims with New York, totaling $20 million. They succeeded in collecting $4.3 million.
The 11 people charged have accepted plea deals and await sentencing.
One defendant in the case against the Step or Die gang has agreed to plead guilty. The others are awaiting trial.
The defendants in the Crips case out of Long Island have also pleaded not guilty and are preparing for trial.
Sen. Joni Ernst, Iowa Republican, finds the whole situation appalling.
She said the SBA was running “a drive-thru for fraudsters.”
“The agency cut billions of dollars of checks to almost anyone who asked, in any amount requested, without even doing simple background checks or verifying the accuracy of applications,” Ms. Ernst said.
Mr. Talcove said punishments for the pandemic cases tend to run lower than other criminal activities.
Indeed, one former Crips gang member in California cited that fact in pleading for a lower sentence.
Christina Smith, a one-time member of the Hoover Crips out on parole, had her friend still inside prison gather inmates’ identities. Smith then submitted unemployment applications under those names, netting more than $200,000 in bogus pandemic payments.
Smith, who spent some of the money on plastic surgery, got a five-year prison sentence.
But her lawyer said it seemed like she was being punished worse than other pandemic fraudsters because of her criminal-gang history.
“It simply should not be that a mentally ill, African-American woman who has endured poverty and strife her entire life should be penalized more harshly than white-collar professionals for similar or much less egregious conduct,” said Jaya C. Gupta, the public defender who handled Smith’s case.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.