March 18, 2020
A simple Google search for the words “coronavirus” and “fraud” or “scam” unfortunately yields countless news stories, articles, and blog posts describing or warning against various scams, fraud, and price gouging occurring across the country since the outbreak of the coronavirus. On Monday, the Department of Justice took action and Attorney General Barr issued a memorandum to all U.S. Attorneys directing them to prioritize the detection, investigation, and prosecution of all criminal conduct related to the coronavirus pandemic (COVID-19).
Barr specifically noted that there have been reports of individuals and businesses selling fake cures for COVID-19, engaging in other forms of fraud, reports of phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention, and reports of malware being inserted onto mobile apps designed to track the spread of the virus. These reported schemes have made news recently in the media. For example, a week ago the New York and Missouri attorneys general ordered famed televangelist Jim Bakker to cease making claims that his Silver Solution that he sold would eliminate the novel coronavirus. Over a month ago, the email security firm Proofpoint identified a series of phishing attempts directed at businesses vulnerable to coronavirus-caused trade disruption. It also seems likely that the sharp economic downturn that the coronavirus has sparked will lead to investigations into financial fraud.
It is likely that the coronavirus will have a substantial effect on the types and volumes of cases that the DOJ brings in the coming weeks and months. As businesses shutter and daily life comes to a near standstill in some parts of the country, including a potential shelter in place order coming to the economic capital of the world (New York City) in the next 24-48 hours, it is unclear how long this will last. Attorney General Barr’s memorandum, however, is a reminder that while much of the country is at home, the DOJ will continue to seek out and prosecute those who “seek to profit from public panic” and that they will be vigilant to guard against any such conduct. We expect to start to see the DOJ’s new enforcement priorities play out in the coming weeks and months.
Nelson Mullins can help companies and individuals navigating the evolving regulatory and legal environment relating to the novel coronavirus. The White Collar Defense and Government Investigations Group has extensive experience responding to regulator inquiries and other government investigations, as well as representing clients in related criminal and civil litigation, including class action lawsuits.
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