They say the defendants secured free hotel rooms by falsely claiming to be health care workers and then sold those rooms to other people.
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The defendants allegedly diverted more than 2,700 nights of hotel room stays, which the government had paid some $400,000 for.
Chanette Lewis, Tatiana Benjamin, Tatiana Daniel and Heaven West are all facing charges.
Lewis is also facing charges in a second COVID scheme involving unemployment benefits fraud.
Lewis and Daniel were arrested Tuesday in New York and West was arrested in Atlanta.
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Benjamin is still missing and has not yet been arrested.
"At the height of the COVID-19 pandemic in 2020, New York City designed a program to provide hotel rooms, free of cost, for qualifying individuals who could not safely self-isolate in their own homes, such as healthcare workers and individuals infected with COVID-19," Manhattan U.S. Attorney Audrey Strauss said. "As alleged, the defendants abused this program by falsely claiming to be healthcare workers and by selling hotel rooms to non-qualifying individuals. When, as alleged here, people illicitly exploit a public health crisis for private gain, they will find themselves facing criminal charges."
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