The new Coronavirus outbreak is having a huge impact on everyone’s lives, throughout the world. Apart from changes in the lifestyle, in economics, and the introduction of new norms, the novel COVID-19 pandemic is also affecting the way many people are trying to engage in fraudulent practices. Recently, the FBI and the DOJ have noticed an increase in individuals and companies accused of hoard PPE or sell fraudulent test kits but also being involved in price gouging and engaging in other illegal practices that are designed to profit from the recent pandemic crisis.
In particular, there have been several cases to which the FBI (the Federal Bureau of Investigation) and the US Department of Justice have launched investigations. Because of the novelty of the situation, to keep track of such fraudulent acts was initially quite challenging. But engaging in the previously listed illegal activities can lead to severe penalties that the FBI and the DOJ are implementing. Also, other than prosecutions for consumer fraud, mail fraud, wire fraud, and False Claims Act violations, the offenses committed during the recent Coronavirus crisis can be prosecuted under the Defense Production Act. This is something new as there were some questions and doubts about the extent of the DPA’s intervention during the crisis. It is now clear that prosecutors have been and will be using the DPA to target both companies and individuals accused of illegally taking advantage of the crisis.
What If You Are Facing Federal Fraud Charges During the COVID-19 Crisis?
In case you or your company are under investigation for hoarding, false advertising, price gouging, or other alleged fraudulent practices, you must make use of experienced federal defense counsel. With both the DOJ and the FBI taking action against companies and individuals that are trying to take advantage of the crisis to make some financial income, you need to take immediate action to protect both you and your company, even if you are sure that you are not doing anything wrong. The White House has indeed given the mandate to the FBI and to the DOJ to take action to ensure the safety of people and avoid any supply chain’s disruption. The investigations are quick to move and the charges can be carrying severe charges which can become difficult to deal with without the right team backing you.
The good news is that The Criminal Defense Firm is actively representing clients in federal fraud investigation during this new pandemic. On top of our senior attorneys, who carry with them plenty of considerable experience and most of whom have a history in the DOJ or the FBI, our team is also made of former federal law enforcement agents with other agencies. Thanks to centuries of experiences with high-stakes investigations under federal law, and with our practice that is heavily focused in the field of health care defense, we offer to our clients a unique kind of protection and service when it comes to accusations of fraud, especially those related to the country’s efforts to fight the new COVID-19 outbreak.
What Are PPE Fraud And COVID-19 Testing Frauds?
Because of the new situation, various types of commercial activities and businesses can now be accused and prosecuted for fraud under federal law. The Department of Justice is focusing on targeting companies or even individuals that are providing either dangerous Personal Protective Equipment (shortened with PPE) or defective or dangerous lab tests, that do not provide consumers or even health care providers with the right equipment to safety test or to protect themselves by the virus.
To make things even clearer to you, we collected a list of some of the frauds that could lead to prosecution under several federal laws:
Selling Unsafe or Ineffective PPE or COVID-19 Testing Kits
The sad truth is that many companies are now scrambling to make masks or other kinds of personal protective equipment and many labs are working hard to be the first ones bringing reliable COVID-19 tests to the market. With so many companies working hard and making enormous efforts to help the whole country fighting this disease, it is important to ensure that the necessary supplies reach the right people as quickly as possible. Companies that are engaging with the production or the sale of PPE that does not provide the right kind of protection or even with the sale of testing kits that are not reliable are considered as illegal and therefore prosecutable.
Selling Unauthorized Covid-19 Test Kits
The US Drug and Food Administration has issued warnings about the sale of fraudulent test kits for COVID-19 and has published an extensive list of some of the most frequently asked questions on the subject. The list includes what distributors, retailers, and manufacturers are allowed to offer and what is not allowed to be sold to consumers and health care providers. Selling unauthorized lab test kits is a crime prosecutable under federal law ads fraud.
Collecting Payment even for Protective Equipment or Testing KIts that Have Not Been Delivered
One common form of fraud is the one involving the sale and production of face masks, sanitizers, shields, and testing kits. The collection of payment without the delivery of the goods offered is a crime that carries the risk for federal criminal prosecution. Remember to watch out from fake news, as a recent case of such fraud turned out to be the result of a major misunderstanding massively fueled by social media.
Hoarding and Price Gouging
The federal authorities are now targeting individuals and companies for engaging with price gouging and hoarding both with PPE and test kits. The US President has recently issued Executive Orders that forbid such practices, with the DOJ aggressively targeting anyone suspected of such crimes.
Making False or Misleading Claims on the Effectiveness and Efficiency of the products sold
PPE and COVID-19 test kits must comply with the federal laws on consumer protections. Making false claims on the reliability of such equipment is a fraud with steep penalties under federal law. The most hit companies are those making representation without an adequate basis.
Engaging in issues involving false representations all to secure contracts for the supply of PPE and COVID-19 testing
Companies can also make claims as a way to secure government or private contracts for the supply of tests or PPE. Such companies will be prosecuted by the DOJ with accusations including (but not limited to) the volume of equipment that can be delivered, claims on the quality of the equipment, and claims regarding the availability of PPE or testing equipment.
Delivering Substandard PPE or Unauthorized COVID-19 Tests
Delivering unauthorized kits behind the promise of high-quality products is another prosecutable crime under federal law. Such a crime is often referred to as “bait and switch”. The failure to perform as promised has the potential to lead to substantial liability.
Identity Theft Schemes Related to the recent Coronavirus Outbreak
US residents have been warned by the FBI of the risk of identity theft during this outbreak. That means that the bureau has been the testimony of various instances of such conduct. Most of the time it seems that some sellers are been rising their dales through social media platforms, telemarketing calls, and door-to-door visits and promising free care to patients in exchange for access to personal and health insurance information, such as birth date, social security numbers, and financial data.
Advance Fee and Schemes of Business Email Compromise
Health care providers and government entities have been warned by the FBI to be extremely cautious with the payment of fees in advance and business email compromise schemes related to the recent Coronavirus outbreak. Some companies are attempting to obtain payment fraudulently from desperate health care providers and government entities who need medical supplies and protective equipment.
Billing Medical Care, Medical aid or other programs for Laboratory Tests and PPE
Health care providers and PPE suppliers, as well as laboratories, must avoid allegations of fraud during this crisis. Companies found to improperly bill government health care benefit programs such as Medicare or Medicaid are at risk of prosecution under the statute of False claims and they could be putting at risk even their owners for criminal indictments.
No matter the kind of issues you might be involved with, if your company, your health care practice or you are under investigation for fraud related to the COVID-19 outbreak, there is no time to waste. Make sure you execute the right defense strategy to avoid charges and start with engaging experienced federal defense counsel. Here at The Criminal Defense Firm, we are ready to represent you, to protect your interests at best, Don’t hesitate to contact us: we are available 24/7 for free and completely confidential case assessments.
Contact The Criminal Defense Firm PPE and COVID-19 Test Kits Fraud Defense
Feel free to discuss your situation with a senior federal defense attorney and be ready to accept great advice and to get full and high-quality protection on your case. If you have been facing fraud allegations involving Personal Protective Equipment or even Coronavirus test kits, call 866-603-4540 or contact us online.
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.