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Senate Told That Fraudsters Prey on Pandemic Victims

June 10, 2020 by Tom Ramstack

WASHINGTON – Federal law enforcement officials pledged a vigorous crackdown Tuesday during a Senate hearing on fraudsters who are trying to make easy money off vulnerable people during the coronavirus pandemic.

They accused con artists of selling fake vaccines and cures over the Internet, price gouging on hand sanitizers and filing fraudulent unemployment insurance claims using someone else’s stolen identity information.

The Federal Trade Commission reported that by June 7, Americans had lost an estimated $48 million from fraud related to coronavirus.

“Unfortunately, when you try to do some good in this country, some people try to take advantage of it,” said Sen. Lindsey Graham, R-S.C., chairman of the Senate Judiciary Committee.

He was referring to federal legislation that sought to help Americans who lost their jobs or suffered other financial hardships from the pandemic.

The leading legislation is the The Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act, which is designed to reinvigorate consumer spending as the U.S. economy suffers a severe downturn in the first half of this year.

Some criminals are using hoaxes to get Economic Income Payments authorized under CARES that belong to someone else.

“In my 26 years on this committee, I’ve never seen anything like this,” said Sen. Dianne Feinstein, D-Calif..

The Internal Revenue Service put out an alert to the public this week to notify them of common scams.

In one scenario, scammers are setting up fake charities soliciting donations for coronavirus victims.

Others offer opportunities to invest early in companies developing a coronavirus vaccine with promises of huge returns. The vaccine promotions often are styled as financial “research reports” that predict target prices for the stocks.

Witnesses from the Justice Department, the FBI and the Secret Service described for the Senate Judiciary Committee the tactics they are using to stop some of the fraud.

The FBI has formed a “payroll protection” task force directed at criminals who use other persons’ identification to steal money from their accounts, said Calvin A. Shivers, an FBI investigative division assistant director.

“Through this effort, 116 investigations have been initiated,” he said.

In addition to criminal proceedings, prosecutors are seeking temporary restraining orders against culprits and court-ordered forfeiture of their ill-gotten funds.

Craig Carpenito, a U.S. Attorney from New Jersey, said prosecutions of many of the pandemic fraud cases are complex because of their origin in the business world, which means they are classified as white collar crime.

“It takes some time” to prosecute white collar cases, he said.

Nevertheless, Justice Department attorneys have initiated thousands of investigations nationwide, Carpenito said.

The law enforcement witnesses acknowledged that scams originating overseas are more difficult for them.

In China, a primary problem is medical equipment from online vendors who cannot deliver the products or the quality they advertise.

“There are a lot of products coming from China that are a threat to our public health and now it’s on steroids” because of the pandemic, said Sen. Thom Tillis, R-N.C..

They are taking advantage of states hurrying to catch up on a huge backlog of unemployment claims, the Secret Service reported.

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