COVID-19 Fraud: A Deep Dive into Law Enforcement's Response and Prevention Strategies

Senate Judiciary Committee Holds Hearing on COVID-19 Fraud

Last week, the Senate Judiciary Committee convened a hearing titled 'COVID-19 Fraud: Law Enforcement's Response to Those Exploiting the Pandemic.' The hearing featured testimony from key figures in law enforcement, including William Hughes, Associate Deputy Attorney General at the U.S. Department of Justice, Craig Carpenito, U.S. Attorney for the District of New Jersey, Calvin Shivers, Assistant Director of the Criminal Investigative Division at the Federal Bureau of Investigation, and Michael D'Ambrosio, Assistant Director at the U.S. Secret Service, Department of Homeland Security.

Fraudulent Activities During the Pandemic

The testimonies focused on the various types of fraud that have emerged during the COVID-19 pandemic. These include the sale of counterfeit personal protective equipment (PPE), cyber-enabled fraud, price gouging, hoarding, and fraud related to the CARES Act's Paycheck Protection Program (PPP). As demand for PPE has outstripped supply, the environment has become 'ripe for exploitation,' according to Shivers. In addition to counterfeit PPE, 'advance fee' schemes and business email compromise (BEC) schemes have also proliferated.

Law Enforcement's Response and Prevention Strategies

The FBI has been actively educating the healthcare industry, financial institutions, private sector partners, and the public about the increased potential for fraudulent activities related to the purchase of COVID-19-related medical equipment. Millions of units of PPE have been recovered from price-gouging and hoarding operations, and the FBI is working on redistribution or sale of these items. D'Ambrosio highlighted four categories of threats: COVID-19-related scams, cybercrime, ransomware, and defrauding government and financial institutions. The Secret Service has initiated over 100 criminal investigations, prevented approximately $1 billion in fraud losses, and disrupted hundreds of online COVID-19-related scams.

In conclusion, while criminals have historically exploited emergencies for illicit gain, the scale and scope of fraud associated with the COVID-19 pandemic are unprecedented. Law enforcement agencies are working tirelessly to combat these threats, but public awareness and vigilance are also crucial in preventing and mitigating fraud. Stay informed, verify the authenticity of sellers and transactions, and report any suspicious activities to the appropriate authorities.