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Larry Nassar was among some 1.5 million prisoners who received COVID stimulus checks

After court filings revealed that disgraced USA Gymnastics doctor Larry Nassar received $2,000 in pandemic stimulus payments while incarcerated, the issue of prisoners getting the government checks is once again in the spotlight.

Convicted felons were eligible for all three rounds of individual stimulus payments, which came in the amounts of $1,200, $600 and $1,400, through they had to apply for the benefits and in some cases the payments were garnished for restitution.

In March, as the Biden administration pushed though the latest round of stimulus, Republicans made red meat of the issue, with Senator Tom Cotton fuming that murderers such as Charleston church shooter Dylann Roof and Boston Bomber Dzhokhar Tsarnaev would be eligible for checks.

However, after contentious legal wrangling last year, a federal judge made it clear that inmates were also eligible for the checks issued under the Trump administration, and the ruling ensured that some $1.5 billion in benefits went to 1.5 million prisoners, according to lawyers in the case.

Larry Nassar received $2,000 in pandemic stimulus payments while incarcerated, but he is not alone. Some 1.5 million prisoners received about $1.5 billion in stimulus payments

The exact amounts of stimulus payments received by individuals prisoners are not clear in most cases, and IRS records that would disclose the payments are not available to the public. 

The issue of whether prisoners, including notorious rapists and murderers, should receive stimulus checks has been a source of contention throughout the pandemic.

The CARES Act which authorized the first payment round of $1,200 had language specifically excluding certain categories of tax filers from the payments, including those above a certain income threshold and those listed as dependents by other filers.

However, nothing in the law precluded people in prison from getting the payments, and the broad eligibility rules essentially qualified all American citizens and permanent residents. 

Nevertheless, the IRS initially tried to block payments to prisoners, citing criteria from a 2009 law that suspends Social Security benefits for people in prison.

The IRS and Treasury Department even went so far as to attempt to claw back stimulus payments that had been made to prisoners.

‘A payment made to someone who is incarcerated should be returned to the IRS,’ the Treasury’s office of inspector general wrote in a report last June, which slammed the IRS for issuing payments to 84,861 prisoners totaling some $100 million.

This logic puzzled many legal experts, who questioned the ability of the IRS to create exemptions for the payments that were not written into the law. 

Charleston church shooter Dylann Roof

Boston Bomber Dzhokhar Tsarnaev

Senator Tom Cotton fuming that murderers such as Charleston church shooter Dylann Roof (left) and Boston Bomber Dzhokhar Tsarnaev (right) would be eligible for checks

Last August, the law firm Lieff, Cabraser, Heimann & Bernstein filed a class-action lawsuit on behalf of more than 1.5 million prisoners, demanding that they receive the stimulus payments.

In October, a U.S. district judge in California ordered the IRS to go forward with making the first-round stimulus payments for prisoners. 

Judge Phyllis Hamilton found that the IRS was ‘arbitrary and capricious’ in their decision to withhold payments. The IRS appealed, but the appeal was dismissed with prejudice.

The law firm that filed the case boasted in a statement that ‘the judgment won for our clients may be the largest recovery on behalf of a purposefully disenfranchised group through a single lawsuit ever, securing over $1.5 billion in economic assistance to date.’

When Congress considered the second round of $600 stimulus last July, the Senate Finance Committee proposed language that would have excluded incarcerated people from receiving funds, both retroactively and in subsequent payments.

However, that language did not appear in the final bill, suggesting the subject of payments for prisoners was a point of negotiation behind the scenes.

When the third round of stimulus was debated in March, Republican Senators Tom Cotton and Bill Cassidy put forward an amendment that would prevent $1,400 stimulus checks from going to prisoners. The amendment failed on a party-line vote. 

 

Republicans raged that prisoners would get stimulus checks under President Joe Biden  — but Democrats were quick to point out that the same had been the case under former President Donald Trump.

Prisoner advocates argue that the stimulus checks are an economic lifeline for the financially vulnerable families of the incarcerated.

Not all prisoners received the payments. First of all, they would have had to file tax returns for 2019, or request the payments through an online portal, and inmates in solitary confinement or other close supervision may not have had access to the computers or paper forms needed.

As well, some prison systems have been seizing the funds in cases where inmates own back child support payments or victim restitution.

But in the case of Nassar, who is in federal prison in Florida, the stimulus checks appear to have gone straight through to his inmate account, despite orders for him to pay $57,500 in restitution to his victims.

The Bureau of Prisons allows inmates to keep unlimited amounts of money in their accounts and effectively shields much of that money from collection by various entities, The Washington Post reported. 

Nassar, 57, was arrested at the end of 2017 and in February 2018 sentenced to 40 to 125 years in prison, for sexually abusing hundreds of young female athletes. He was also convicted of possession of child pornography in 2017. 

His prison finances were revealed in a motion filed by prosecutors on Wednesday that seeks to force the Bureau of Prisons to turn over Nassar’s current prison account balance to help cover a court-ordered payment of $5,300 to the federal Crime Victims Fund. 

The filing revealed Nassar has been allowed to spend more than $10,000 on commissary items for himself behind bars, while only paying $100 per year to a fund set up for his victims. 

Nassar owes roughly $57,000 in restitution and a $5,000 special assessment, according to Wednesday’s motion filed with US District Judge Janet Neff in Grand Rapids. 

Prosecutors said federal law requires that money Nassar receives in prison be applied to his restitution obligation. 

Bureau of Prisons officials have required Nassar to pay only about $100 a year, according to court papers, or about $300 since he entered the federal prison system in late 2017 after pleading guilty to receiving and possessing child pornography. 

Nassar has seen $12,825 move through his prison account over the last three and a half years, the court filing said, including two payments for COVID-19-related stimulus from the federal government totaling $2,000. 


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