The US Department of Justice has taken its first enforcement action against COVID-19 fraud, illustrating its previously stated commitment to prosecute “bad actors” attempting to exploit the global health crisis.1 On March 22, 2020, the DOJ announced that it had filed a civil complaint in the US District Court for the Western District of Texas alleging that the operators of the website “coronavirusmedicalkit.com” are engaged in a predatory wire fraud scheme and are attempting to profit from consumer anxiety related to COVID-19 (the coronavirus).
The “coronavirusmedicalkit.com” website purports to offer consumers access to World Health Organization (WHO) “vaccine kits” if the consumer provides credit card information to pay for a $4.95 shipping fee. However, a vaccine protecting against COVID-19 currently does not exist. The operators of the website allegedly induce victims to pay the fee for non-existent kits and/or use the victims’ credit card and personal information for fraudulent purchases and identity theft.
The DOJ, in addition to filing a complaint, requested injunctive relief to protect the public against the alleged wire fraud scheme while it continues to investigate the website and its operators. The following day, March 22, 2020, the Court issued a temporary restraining order, requiring the website’s registrar to block public access to the site immediately.
Earlier this month, Attorney General William Barr announced that the DOJ “stands ready to make sure that bad actors do not take advantage of emergency response efforts, healthcare providers, or the American people during this crucial time.”2 The DOJ explicitly warned the business community that anyone attempting to capitalize on consumer fear related to COVID-19 would be held accountable.3 The Attorney General subsequently issued a memorandum to all US Attorneys directing them to prioritize COVID-19 related fraud schemes, and urged the public to report COVID-19 fraud.4
This enforcement action shows the DOJ’s focus on the deterrence, detection, investigation, and prosecution of fraud and other crimes related to the COVID-19 pandemic. The DOJ, along with other enforcement agencies and regulators, is closely watching how companies and individuals worldwide are responding to the crisis. There are thus sure to be more COVID-19 related enforcement actions, which may focus not only on the individuals who operate COVID-19 scams but also on legitimate businesses that fail to detect and prevent these scams.
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1“Justice Department Files Its First Enforcement Action Against COVID-19 Fraud,” US Department of Justice (Mar. 22, 2020), https://www.justice.gov/opa/pr/justice-department-files-its-first-enforcement-action-against-covid-19-fraud.
2“Justice Department Cautions Business Community Against Violating Antitrust Laws in the Manufacturing, Distribution, and Sale of Public Health Products,” US Department of Justice (Mar. 9, 2020), https://www.justice.gov/opa/pr/justice-department-cautions-business-community-against-violating-antitrust-laws-manufacturing.
3See Legal Alert: The DOJ’s response to COVID-19 for more information.
4“Attorney General William P. Barr Urges American Public to Report COVID-19 Fraud,” US Department of Justice (Mar. 20, 2020), https://www.justice.gov/opa/pr/attorney-general-william-p-barr-urges-american-public-report-covid-19-fraud.
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