{"id":3219,"date":"2020-09-15T09:00:55","date_gmt":"2020-09-15T14:00:55","guid":{"rendered":"http:\/\/blogs.luc.edu\/compliance\/?p=3219"},"modified":"2020-09-15T09:00:55","modified_gmt":"2020-09-15T14:00:55","slug":"dhss-partnership-with-private-industries-leads-to-a-crackdown-of-fraudulent-behavior-during-the-pandemic","status":"publish","type":"post","link":"https:\/\/blogs.luc.edu\/compliance\/?p=3219","title":{"rendered":"DHS\u2019s Partnership with Private Industries Leads to a Crackdown of Fraudulent Behavior During the Pandemic"},"content":{"rendered":"

Michell Pacheco <\/em><\/span><\/p>\n

Associate Editor <\/em><\/span><\/p>\n

Loyola University Chicago School of Law, JD 2022<\/em><\/span><\/p>\n

After the COVID-19 pandemic spread to the U.S. in February of 2020, there was a surge in fraudulent behavior<\/a> as criminals took advantage of the fear revolving around the pandemic to profit from selling defective goods and scamming the public. This has resulted in the loss of millions of dollars<\/a> by the public. Scammers will continue to benefit and take advantage of the public until the government steps in and takes preventative measures to stop this criminal behavior during the pandemic.<\/span><\/p>\n

Fraud\u00a0during\u00a0COVID-19 era<\/strong>\u00a0<\/span><\/p>\n

To deter and prevent\u00a0this\u00a0surge of illegal activity and fraud surrounding COVID-19, Homeland Security Investigations (HSI),\u00a0the largest investigative branch of the Department of Homeland Security\u00a0(DHS),\u00a0launched<\/a> Operation Stolen Promise.\u00a0The operation\u00a0includes a\u00a0public-private partnership<\/a>\u00a0with other\u00a0federal agencies as well as private companies such as Pfizer, Citi, Alibaba, 3M,\u00a0and Amazon.\u00a0Through this public-private partnership,\u00a0HSI\u00a0has\u00a0investigated financial fraud schemes, the importation of prohibited pharmaceuticals and medical supplies, websites defrauding consumers, and\u00a0other\u00a0criminal activity\u00a0that\u00a0has compromised\u00a0the public\u2019s safety during the pandemic.\u00a0\u00a0<\/span><\/p>\n

HSI\u00a0has\u00a0seen a\u00a0significant increase<\/a> in criminals\u00a0attempting to capitalize\u00a0on\u00a0the fear and anxiety surrounding the\u00a0pandemic, including\u00a0the sale of counterfeit pharmaceuticals and medical equipment.\u00a0Fraudsters\u00a0have been selling products and offering treatments<\/a> that supposedly\u00a0cure the viral infection,\u00a0such as taking high doses of intravenous vitamin C, using Chinese herbs, chiropractic treatments, to name a few.\u00a0Further, members of the public are\u00a0receiving calls and emails<\/a>\u00a0appearing to originate from the Center for Disease Control and Prevention\u00a0requesting donations or other personal sensitive information, such as social security information.\u00a0<\/span><\/p>\n

Response to fraudulent behavior from other federal agencies <\/strong><\/span><\/p>\n

Thus far,\u00a0the Federal Trade Commission (FTC) and U.S. Food and Drug Administration have responded by sending warning letters<\/a> to companies that may be violating federal law by selling products that have not been evaluated for safety or effectiveness. FTC has seen an overwhelmed response from companies that have received these warning letters. According to FTC<\/a>, these companies have taken steps to correct inappropriate advertising and marketing language and come into compliance with the law. FTC has also filed lawsuits<\/a> against online merchandisers for failing to deliver on promises to ship PPE equipment during the pandemic quickly. \u00a0<\/span><\/p>\n

The recipient companies<\/a> differed from companies working with DHS in Operation Stolen Promise, such as Amazon and Alibaba, in that they are smaller business models that directly target and contact the consumer to obtain personal information or sell defective products. In contrast, companies like Amazon are e-commerce giants with global operations that do not personally reach out to consumers.\u00a0 \u00a0<\/span><\/p>\n

The FTC has received<\/a> over\u00a0185,000 reports of fraud, identity theft, and other illegal criminal activity,\u00a0including $132 million in total fraud losses. Scammers are specifically targeting older Americans who are concerned about their health and finances. People over forty years of age have been disproportionately affected by\u00a0fraudulent behavior from scammers\u00a0during the\u00a0pandemic.\u00a0Recent data<\/a> suggest that these age groups account for more than half of the public\u2019s total losses from fraud during the pandemic. Fraudsters have primarily benefitted from travel vacation and online shopping scams<\/a>, with reports showing a loss by the public of $58 million.<\/span><\/p>\n

Outcome of DHS\u2019s public-private partnership\u00a0<\/strong>\u00a0<\/span><\/p>\n

Since the\u00a0launch\u00a0of the operation,\u00a0HSI special agents have seized<\/a>\u00a0over $7.9 million in illicit proceeds,\u00a0made fifty-nine criminal arrests, and worked alongside U.S. Customs and Border Protection to seize 969 shipments of mislabeled, unauthorized, and\u00a0prohibited COVID-19 test kits and personal protective equipment (PPE).\u00a0Private industries have also contributed to the fight against fraud during the pandemic. Amazon\u00a0has stopped<\/a> more than 6.5 million products with inaccurate claims, removed over one million offers for suspected price gouging,\u00a0and\u00a0suspended more than 10,000 selling accounts for suspected price gouging.\u00a0By\u00a0identifying and dismantling fraudulent schemes, HSI, with the help of private industries, has\u00a0been able to\u00a0prevent<\/a>\u00a0the illegal criminal trade of\u00a0fraudulent COVID-19 related products\u00a0and protect the\u00a0health and safety of the American public and the American economy.\u00a0<\/span><\/p>\n

What can federal agencies do to prevent\u00a0this behavior<\/strong>\u00a0<\/span><\/p>\n

As\u00a0fraudulent behavior\u00a0surrounding the pandemic rise, federal agencies should continue to increase its preventative measures<\/a>\u00a0by closely monitoring social media, online marketplaces, and incoming complaints to help ensure that companies do not continue to market fraudulent products. Further, an ongoing collaboration of public and private industries will provide HSI and other federal agencies with sufficient support and information about how fraudulent businesses have been using services, such as Amazon, to perform their criminal activities. This public-private partnership will disrupt illegal activity and protect the public from falling victim to future COVID-19 related scams.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

After the COVID-19 pandemic spread to the U.S. in February of 2020, there was a surge in fraudulent behavior as criminals took advantage of the fear revolving around the pandemic to profit from selling defective goods and scamming the public. This has resulted in the loss of millions of dollars by the public. Scammers will continue to benefit and take advantage of the public until the government steps in and takes preventative measures to stop this criminal behavior during the pandemic.<\/p>\n","protected":false},"author":73,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[468,534,552,613,907,1205,1690],"class_list":["post-3219","post","type-post","status-publish","format-standard","hentry","category-fraud-abuse","tag-compliance","tag-covid-19","tag-cyber-fraud","tag-dhs","tag-fraud-and-abuse","tag-journal-of-regulatory-compliance","tag-regulation"],"_links":{"self":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/3219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/users\/73"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3219"}],"version-history":[{"count":0,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/3219\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}