The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have taken legal actions to combat fraud arising out of the COVID-19 health emergency.
DOJ Restraining Order
On March 23, 2020, the U.S. District Court for the Western Division of Texas issued a temporary restraining order to halt a predatory wire fraud scheme related to coronavirus treatment sales. The DOJ brought charges, pursuant to 18 U.S.C. § 1345, which permits the government to enjoin an ongoing fraud to prevent irreparable harm to the public.
In the case, United States of America v. John Doe a/k/a “coronavirusmedicalkit.com,” the government alleges that persons operating the website published statements fraudulently claiming that the World Health Organization is giving free away vaccination kits to immunize people from the COVID-19 outbreak. The website required visitors to enter credit card information and pay a $4.95 shipping fee to receive the free vaccine. The government alleged, “[t]he purpose of the website is to induce victims to pay Doe and those working in concert with him or her $4.95 for such non-existent kits, and/or to obtain credit card and other personal information from victims for purposes of engaging in fraudulent purchases and identity.”
Attorney General William Barr has signaled that coronavirus fraud is a top priority of the Justice Department. Federal prosecutors in United States v. Doe echoed this statement, warning
the Department of Justice will not tolerate criminal exploitation of this national emergency for personal gain. We will use every resource at the government’s disposal to act quickly to shut down these most despicable of scammers, whether they are defrauding consumers, committing identity theft, or delivering malware.
Deputy Attorney General Jeffrey A. Rosen recently sent a memo to all U.S. Attorneys directing them to appoint a COVID-19 Fraud Coordinator to “serve as the legal counsel for the federal judicial district on matters relating to the COVID-19, direct the prosecution of COVID-19 related crimes, and to conduct outreach and awareness activities.” The national Fraud Coordinator is establishing a web portal for all U.S. Attorneys to coordinate COVID-19 fraud litigation with 16 other federal agencies.