They say the defendants secured free hotel rooms by falsely claiming to be health care workers and then sold those rooms to other people.
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.
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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