The litany of COVID-19-related criminal and regulatory violations range from the obvious to the most sophisticated. They include price-gouging, false marketing of purported cures or COVID-19 tests, phishing calls or texts from persons promising to provide economic assistance in exchange for personal information, and fraudulent statements on applications for CARES Act-related relief.
And, as predicted in our client alert (Government Enforcement in the Shadow of COVID-19), law enforcement and regulators have begun to crack down. They have initiated a number of investigations and prosecutions aimed at both punishing those they believe have crossed the line and deterring other like-minded individuals who might be tempted to do so.
Notably, these enforcement actions were brought quickly. Indeed, given the public circumstances, there is a huge amount of public pressure on investigators, prosecutors, and regulatory agencies to file charges. For example, as of this week, the Federal Trade Commission has fielded about 16,800 complaints of fraud related to COVID-19, with a total reported loss of nearly $13 million.1 The public pressure and support for action only underscores the need for those companies and individuals under investigation to seek qualified outside counsel at the earliest possible juncture.
We have seen these types of “rush-to-judgment” filings previously during national emergencies, such as those occasioned by Hurricane Katrina. We can help prepare and guide you through them, whether you or your company are the target of, or cooperating with, law enforcement or a regulator.
What follows are some examples of notable federal and state actions, which give a flavor of what you can expect to see at both the federal and state level in the coming weeks and months:
Should you wish to discuss this further, please contact Melissa Meister, Ashley Martabano, or any of the attorneys at Baker Marquart LLP.
1 Los Angeles Times, “Fake cures, scams, phony medications and price gouging: Predators pounce during coronavirus,” available at https://www.latimes.com/california/story/2020-04-14/coronavirus-home-test-treatment-scams (April 13, 2020).
2 TN Attorney General’s Office, “AG Slatery Investigates Reports of Price Gouging; Issues Stop and Desist,” available at https://www.tn.gov/attorneygeneral/news/2020/3/15/pr20-10.html (March 14, 2020).
3 News Channel 5, Nashville, “State officials investigating several complaints of price gouging violations,” available at www.newschannel5.com/news/state-officials-are-investigating-several-complaints-of-price-gouging-violations (March 16, 2020).
4 WA Attorney General’s Office, “AG Ferguson Sends Cease and Desist Letters to Price-Gouging Washington-Based Online Businesses,” available at https://www.atg.wa.gov/news/news-releases/ag-ferguson-sends-cease-and-desist-letters-price-gouging-washington-based-online (March 31, 2020).
5 dcist, “D.C. Man Arrested in Coronavirus-Related Scam,” available at https://dcist.com/story/20/04/06/d-c-man-arrested-in-coronavirus-related-scam/ (April 6, 2020).
6 DOJ Office of Public Affairs, “Georgia Resident Arrest for Selling Illegal Products Claiming to Protect Against Viruses”, available at https://www.justice.gov/opa/pr/georgia-resident-arrested-selling-illegal-products-claiming-protect-against-viruses (April 9, 2020).
7 DOJ Office of Public Affairs, “Georgia Man Arrested for Attempting to Defraud the Department of Veterans Affairs in a Multimillion-Dollar COVID-19 Scam”, available at https://www.justice.gov/opa/pr/georgia-man-arrested-attempting-defraud-department-veterans-affairs-multimillion-dollar-covid (April 10, 2020).
9 WPXI, “FBI in Pittsburgh helps stop multimillion dollar scheme targeting a health care system,” available at https://www.wpxi.com/news/top-stories/fbi-pittsburgh-helps-stop-multi-million-dollar-scheme-targeting-healthcare-system/LM2XJPOVOFD3ZHZJ2UBVQ25PRE/ (April 6, 2020).