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The Coming Wave of COVID-19 Fraud Cases: What to Watch Out For

Crises reveal the best and worst of human character. The “better angels of our nature show up in ways that are inspirational, life-affirming, and difference-making: health care workers put their lives on the line every day knowing that they, too, may be in harm’s way just by doing their jobs; journalists show up in war zones so that the rest of us can know what’s happening in the world; a soldier risks his own life to ensure the safety of his comrades.    

And…  

Sadly, as surely as these beautiful tales of altruism and hope emerge in the chaos of the COVID-19 crisis, so too will the darker side of human nature:  the side of self-interest, greed, and opportunism. It is as predictable as the tide and in fact is already upon us.   

Reporting COVID-19 Fraud Scams

Last month, the United States Department of Justice issued a press release encouraging the public to notify the National Center for Disaster Fraud (NCDF) if they become aware of any type of scam relating to the COVID-19 crisis. Both the Food & Drug Administration and the Office of Inspector General of the Office of Health & Human Services issued press releases of their own warning of fraud involving the virus.  

All 93 United States Attorney’s Offices across the country have been ordered to appoint a Coronavirus Fraud Coordinator for their individual offices, so confident are they that the cases are coming. The government has established a national hotline of 1-866-720-5721 to report fraud. In addition, emails can be sent to disaster@leo.gov. Several U.S. Attorney’s offices have issued their own press releases urging the public to report fraud.   

Federal Authorities Are Already Cracking Down 

On March 22, 2020, the Department of Justice announced that it had filed a civil  enforcement action to shut down the operators of a website selling bogus COVID-19 “vaccine kits.”    

 On Thursday, March 26th, the FBI in New Jersey filed a criminal complaint against an individual for promoting fraudulent COVID-19 test kits, charging both violations of the Federal Anti-Kickback Act and conspiracy to commit health care fraud.  Both are felonies that carry a substantial risk of imprisonmentHe was arrested in Georgia four days later.   

The False Claims Act Is A Powerful Weapon To Fight COVID-19 Fraud

Our country has been down this road before. In fact, we’ve been down it so many times that the NCDF is a standing office of the government, not something that had to be quickly formed in response to the COVID-19 outbreak. Our history is full of examples of opportunistic fraud in times of crisis. We saw it with the way profiteers pounced when government coffers opened post 9/11. Post-Katrina. During the Iraq War.

Notably, this kind of fraudulent opportunism caused Congress to pass and President Lincoln to sign the original False Claims Act of 1863, a whistleblower law designed to incentivize insiders to alert the government of how and when it was being ripped off. Even during our country’s ultimate existential crisis, Congress had to pass a special law to try to stop contractors from selling rotten food and lame horses to the Union Army. 

 The False Claims Act (FCA) encourages individuals who know of fraud to bring a lawsuit and report the fraud to the government. To provide an incentive for doing this, the FCA rewards whistleblowers with a percentage of what the government recovers. While the FCA has been hugely successful as an anti-fraud tool, particularly in the last thirty years, it has not stopped fraud in its tracks, merely slowed it down.  You cannot, it turns out, stop the rhythm of the tides.  The lesser angels” of our nature reveal themselves during times of crisis, looking to make money for themselves while others suffer.   

What To Watch Out For

So, while some among us are working overtime to save lives and invent vaccines, others are pushing the fraud envelope and trolling for their next victim.  Here’s a sampling of what the Department of Justice says to be on the lookout for:    

  • Individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud. 
  • Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention. 
  • Malicious websites and apps that appear to share Coronavirus-related information to gain and lock access to your devices until payment is received. 
  • Seeking donations fraudulently for illegitimate or non-existent charitable organizations.   
  • Doctors using patient information for COVID-19 testing and then using that same information to bill for other tests and procedures.    

 Here are some other recent scams that people around the country are already reporting:   

  • People seeking donations for illegitimate or non-existent charitable organizations. 
  • Identity thieves telling persons their stimulus checks are ready and asking for bank account and Social Security numbers. 
  • Scammers impersonating governmental organizations and urging people to reserve a vaccine for COVID-19 with their credit cards. 
  • Hackers using mobile apps and websites purportedly designed to track the spread of COVID-19 to infect users’ devices with ransomware, then seeking payment to reverse the damage. 
  • Bogus promotions on social media platforms claiming that products or services of publicly traded companies can prevent, detect, or cure COVID-19, causing the stock of these companies to increase dramatically.   

The FDA warns consumers to be on the lookout for fraudulent test kits, vaccines, and treatments, and has already sent out dozens of warning letters to manufacturers demanding that they cease marketing unapproved products for COVID-19 and cease making unsubstantiated claims.  The HHS-OIG, similarly, warns against Medicare beneficiaries being asked to give up their personal health information and Medicare number to scammers and telemarketers, urging beneficiaries to involve their physician in approving any such requests and to ignore information coming from social media sites.    

What You Can Do To Protect Yourself And The Public

Chaos and fear create the perfect storm for COVID-19 fraud schemes. As with the virus itself, the coming wave of COVID-19 fraud is not a reason to panic. However, it is a cause for vigilance. You can take steps to protect yourself from scams. There are hotlines and law enforcement agents to call. In addition, you can turn to whistleblower lawyers who have seen such scams before. Whistleblower attorneys help citizens expose wrongdoing. Whistleblowers can receive awards under the False Claims Act if their information leads to a successful case.

As a country we will eventually emerge from this crisis smarter than before.  We will have stories of great individual and collective heroism.  With any luck, we will have flattened the curve in time despite our late start. The sheer force of human will and commitment will save lives.

But we will not have stopped the rhythm of the tides. We will have stories as well of people using this crisis to turn a public emergency into a quick buck. These will occur along with the stories of salvation and grace. It is part of the complexity of humanity that we possess the capacity for both.

As we all navigate these waters, listen to scientists and get facts from reputable sources only. Keep your eyes open – both for the beauty and for its opposite. As the saying goes, if something sounds too good to be true, it usually is.  If you suspect fraud, make a report to law enforcement or contact a whistleblower attorney.

 

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