As the public faces the crisis related to the 2019 novel coronavirus (COVID-19), federal authorities announced initial actions against individuals and companies promoting fraudulent schemes and products to the public. Federal agencies suggest concerns that individuals and companies are targeting vulnerable consumers and seeking to profit from the confusion and widespread fear during the pandemic.
The U.S. Department of Justice (DOJ) announced its first enforcement action filed in federal court against operators of a fraudulent website allegedly engaging in a wire fraud scheme seeking to profit from COVID-19. The Government alleges that the website offered consumers access to “World Health Organization (WHO) vaccine kits” in exchange for a shipping charge and credit card information. The DOJ obtained a temporary restraining order requiring that the registrar of the website immediately take action to block public access to it. There are currently no approved vaccines or drugs for COVID-19.
Furthermore, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently alerted the public about fraud schemes wherein scammers are offering COVID-19 tests to Medicare beneficiaries in exchange for personal details, including Medicare information. The OIG reports that scammers are targeting Medicare beneficiaries using multiple platforms, including social media, telemarketing calls, and even door-to-door visits. Scammers target this information for use in identity theft schemes and, here, could charge Medicare and Medicaid beneficiaries for unapproved tests or other services.
The Federal Bureau of Investigation (FBI) similarly warned the public, “Scammers are leveraging the COVID-19 pandemic to steal your money, your personal information, or both.” Specifically, the FBI warned that they are seeing fake emails claiming .to be from the Centers for Disease Control and Prevention, phishing emails purporting to accept charitable donations and sales offers of counterfeit treatments or equipment. The FBI specifically wants individuals to be cautious of products claiming to prevent, treat or diagnose COVID-19, as such products are likely fake, counterfeit or unapproved devices.
Finally, similar to the FBI’s concerns, the U.S. Food and Drug Administration (FDA) has warned the public against fraudulent “at-home” COVID-19 testing kits. No such at-home tests have been approved as safe or effective by the FDA, and, accordingly, the FDA and the Federal Trade Commission (FTC) have jointly issued seven warning letters against companies marketing such fraudulent at-home tests. The warning letters are merely a first step, as the FDA notes that it is prepared to take additional actions against any companies selling fraudulent testing kits.
Federal agencies have suggested healthcare providers serve as gatekeepers for consumers, assessing an individual’s condition and approve any requests for COVID-19 testing. Healthcare providers should be aware of this guidance and anticipate serving in this gatekeeping role for patients who may instead be considering unapproved at-home tests if they have not been able to obtain a test in another manner.
The situation is rapidly evolving and we will continue to monitor any additional federal enforcement actions related to COVID-19. The National Center for Disaster Fraud has provided a hotline (866-720-5721) and email (firstname.lastname@example.org) to report suspected fraud.
McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial coronavirus-related business and legal issues, and the firm’s COVID-19 Response Team stands ready to help clients navigate urgent and evolving legal and business issues arising from the novel coronavirus pandemic.