Justice Department Files Its First Enforcement Action Against COVID-19 Fraud

  • Source:  justice.gov

Treliant Takeaway:

The financial services industry prepares to control another threat abounding amidst the country’s COVID-19 pandemic upheaval: fraudulent activities. As technology usage escalates to unparalleled levels both on the home front and in work environments, fraudster attempts to take advantage of vulnerable Americans and businesses are escalating. Banks may need to increase diligence under customer identification and fraud prevention programs to avoid inadvertent facilitation of fraudulent activities. Treliant experts offer advisory services related to cybersecurity, privacy, securities compliance, anti-money laundering / Bank Secrecy Act (AML/BSA), anti-fraud / anti-terrorist financing programs, forensic technology, as well as corporate and regulatory investigations. If you need assistance identifying and managing fraud-related risks, Treliant can help.

Article Highlights:

On March 21, 2020, the Department of Justice (DOJ) filed its first enforcement action in federal court to suspend the operations of a fraudulent website offering COVID-19 vaccines. A known vaccine does not exist at this time. A temporary restraining order was issued by federal courts in Austin to halt the website’s operations while the investigation ensues. The filing represents the DOJ’s affirmative action to combat pandemic-related fraud, following Attorney General William Barr’s direction for the department “to prioritize the detection, investigation, and prosecution of illegal conduct related to the pandemic.”

Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division states that the DOJ “will not tolerate criminal exploitation of this national emergency for personal gain. We will use every resource at the government’s disposal to act quickly to shut down these most despicable of scammers, whether they are defrauding consumers, committing identity theft, or delivering malware.”

The DOJ release provides the following precautionary measures, which Americans should take to protect themselves from known and emerging scams related to COVID-19:

  • Independently verify the identity of any company, charity, or individual that contacts you regarding COVID-19.
  • Check the websites and email addresses offering information, products, or services related to COVID-19. Be aware that scammers often employ addresses that differ only slightly from those belonging to the entities they are impersonating.  For example, they might use “cdc.com” or “cdc.org” instead of “cdc.gov.”
  • Be wary of unsolicited emails offering information, supplies, or treatment for COVID-19 or requesting your personal information for medical purposes. Legitimate health authorities will not contact the general public this way.
  • Do not click on links or open email attachments from unknown or unverified sources. Doing so could download a virus onto your computer or device.
  • Make sure the anti-malware and anti-virus software on your computer is operating and up to date.
  • Ignore offers for a COVID-19 vaccine, cure, or treatment. Remember, if a vaccine becomes available, you won’t hear about it for the first time through an email, online ad, or unsolicited sales pitch.
  • Check online reviews of any company offering COVID-19 products or supplies. Avoid companies whose customers have complained about not receiving items.
  • Research any charities or crowdfunding sites soliciting donations in connection with COVID-19 before giving any donation. Remember, an organization may not be legitimate even if it uses words like “CDC” or “government” in its name or has reputable looking seals or logos on its materials.  For online resources on donating wisely, visit the Federal Trade Commission (FTC) website.
  • Be wary of any business, charity, or individual requesting payments or donations in cash, by wire transfer, gift card, or through the mail. Don’t send money through any of these channels.
  • Be cautious of “investment opportunities” tied to COVID-19, especially those based on claims that a small company’s products or services can help stop the virus. If you decide to invest, carefully research the investment beforehand.  For information on how to avoid investment fraud, visit the U.S. Securities and Exchange Commission (SEC) website.

The public is encouraged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at disaster@leo.gov. For the most up-to-date information on COVID-19, consumers may visit the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO) websites.   

Author

Brenda Baylor

Brenda Baylor, a Director with Treliant, is a Certified Regulatory Compliance Manager (CRCM) with 22 years of experience in regulatory compliance, risk management, and banking. Her specialties include fair lending laws and regulations; the Community Reinvestment Act (CRA); Home Mortgage Disclosure Act (HMDA); and Unfair, Deceptive, or Abusive Acts or…