U.S. Department of Justice Files Civil Complaint for COVID-19-Related Fraud

By Brett M. Feldman and Jessica Linse

Since the outbreak of the COVID-19 virus, law enforcement officials throughout the country have publicly committed to aggressively combatting pandemic-related fraud. Those pronouncements have translated into action focused, at least at this early stage, upon frauds which might impact consumers’ health and safety. The first federal civil enforcement action took place on Saturday, March 21, 2020. On that date, the U.S. Department of Justice, in coordination with the U.S. Attorney for the Western District of Texas, filed the first civil enforcement action against a COVID-19 related fraud. Prosecutors sought an injunction shutting down a website, which purportedly offered to provide “free” coronavirus “vaccine kits” for a $4.95 shipping and handling fee. This request for injunctive relief, which resulted in a temporary restraining order pursuant to 18 U.S.C. § 1345, is likely an omen of more to come.

In the Texas case, the Government alleges that the John Doe defendant, using the website alias “coronavirusmedicalkit.com,” committed wire fraud in violation 18 U.S.C. § 1343 by promising to provide a coronavirus vaccine, even though no such vaccine exists. According to the Complaint, the website states, “[d]ue to the recent outbreak for the Coronavirus (COVID-19) the World Health Organization is giving away vaccine kits. Just pay $4.95 for shipping.”  The website then links to a page to “Order Now,” which requests that visitors input credit card and billing information. The website also allegedly includes an image of Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health, which, according to the Complaint, lends “the imprimatur of the United States government to [its] claims.”. The Government’s request for a temporary restraining order also references the fraudulent website’s domain registrar, but did not name that entity as a defendant.  The Court issued the requested TRO on Sunday, March 22, 2020.

Although the federal government’s efforts in Texas appear to be the most aggressive action taken to date, law enforcement agencies in other jurisdictions have announced COVID-19-specific anti-fraud efforts. For example, on Thursday, March 19, 2020, the U.S. Attorney for the Western District of Pennsylvania and Pennsylvania Attorney General announced a joint COVID-19 Task Force. According to the press release, the Task Force’s purpose is to “marshal the collective investigative power of our federal and state law enforcement agencies” to combat “scams being perpetrated on-line and in-person . . . seeking to exploit the evolving coronavirus public health crisis.” A similar partnership has been announced between the Commonwealth of Virginia, and the U.S. Attorney’s Offices for the Eastern and Western Districts of Virginia. 

To date, law enforcement efforts to combat COVID-19-related fraud focus on consumer-facing schemes. As the government response to the pandemic ramps up, both with particular respect to law enforcement activity and more broadly, individuals, businesses, and business-owners should be vigilant. Claims made about qualifications for forthcoming federal relief programs are likely to draw intense scrutiny once the government’s attention turns away from frauds directly impacting the health and safety of consumers.

Read more about the Government’s action in Texas at the U.S. Department of Justice website.