Investigations for Fraud Related to COVID-19 Personal Protection Equipment (PPE) is on the Rise
Fraud and scams for personal protective equipment (PPE) and Covid-19 testing are on the rise—what are Pennsylvania legislators doing to prevent it?
The COVID-19 pandemic has caused the demand for personal protective equipment and other medical supplies to rise significantly. As a result, government authorities expect to see a rise in fraudulent activity, such as stockpiling supplies with the intention of selling them and making a profit, selling counterfeit or faulty medical products while making misleading statements about their effectiveness, and making false statements to the government to secure COVID-19 related assistance or contracts.
To combat this risk of fraud, President Trump issued an executive order which among other things prohibits the hoarding of designated items and criminalizes the accumulation of designated items in excess of reasonable personal need, or for the purpose of selling the items for exorbitant prices. The list of designated items, as identified by the Department of Health and Human Services, includes masks, ventilators, medical gowns, gloves, and other personal protective equipment (known as “PPE”).
The U.S. Department of Justice (“DOJ”) is prioritizing the investigation and prosecution of perpetrators of PPE-related fraud. As Attorney General William Barr noted in his memo to each U.S. Attorney’s office, the DOJ “will aggressively pursue bad actors who amass critical supplies either far beyond what they could use or for the purpose of profiteering.”
The DOJ has also created one nationwide federal law enforcement task force, the “COVID-19 Hoarding and Price Gouging Task Force,” which announced the arrest of a man who attempted to sell $750 million in nonexistent PPE to the Department of Veteran Affairs.
Under the federal False Claims Act (the “FCA”), substantial penalties may be imposed on persons and companies who defraud governmental programs.
In addition, the President’s executive order makes violations punishable by fines of up to $10,000 and imprisonment for up to one year.
Pennsylvania Legislation to Combat PPE Fraud
In addition to the federal government’s efforts, state law enforcement authorities have formed task forces to investigate and prosecute these types of cases. In Pennsylvania, Scott W. Brady, United States Attorney for the Western District of Pennsylvania, and Pennsylvania Attorney General Josh Shapiro formed the Western Pennsylvania COVID-19 Fraud Task Force, which brings together federal and state investigative agencies and prosecutors to combat PPE fraud in Pennsylvania. The task force has set up a dedicated toll-free hotline and dedicated e-mail addresses for the public to report suspected COVID-19 related fraud.
Pennsylvania currently does not have a false claims statute in place. However, in September 2020, the Commonwealth Fraud Prevention Act (CFPA) was introduced in the Pennsylvania Senate which is inspired by the FCA. If signed into law, the CFPA would form an essential part of the state’s plan to fight fraud related to COVID-19 stimulus funds, as well as other state programs.
What Happens if You Are Charged with PPE Fraud in Pennsylvania?
A federal or state investigation for PPE fraud can lead to severe civil and criminal penalties and imprisonment.
An aggressive attorney can navigate the investigation process and any litigation process on your behalf and give you the best chance at avoiding a negative outcome on your case.
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