Investigating Holiday Crimes During a Pandemic

Mostly everyone – including the criminals – loves the holidays. Your city will likely see an increase in crime, especially white-collar crime, over this year’s holiday season. But this year’s increase in crime is going to look a bit different because of nationwide political pressure, low employee morale and, of course, the coronavirus.

COVID-19 has affected us all, and we are all hopeful for significant health improvements in 2021. Unfortunately, the coronavirus created more than just health problems, it led to COVID-related crimes.

COVID crimes are any crimes related to COVID-19. Just as infection rates of COVID-19 will increase well into the winter, so will COVID-related crimes.

Here are four common COVID-related crimes agencies should prepare for during this holiday season:

1. CHARITABLE DONATION FRAUD

Charitable donation fraud always increases toward the end of the year. Holidays create a contagious spirit of giving. Even those Ebenezer Scrooge-types who don’t have the spirit of giving may still want to donate more just to claim those end-of-year tax credits.

What adds fuel to the chestnut fire is that charitable donation fraud also increases during high-profile disasters like hurricanes, earthquakes and pandemics. Criminals are using this one-two punch of the holiday season pandemic to really exploit the vulnerable.

Charity donation fraud can come in many forms: emails, cold calls, social media posts and carefully drafted crowdfunding platforms. Criminals can be local, national, or international, making finding the correct jurisdiction that much more difficult.

Investigators should track the money in these cases. Money leads to suspects. Spend a few extra minutes asking your victims how they transferred the money. Cash App, Venmo, Zelle and PayPal are just a few of the preferred methods for criminals.

Investigators should take time to educate the victim. Encourage the victim to always do their homework before giving. They can use Charity Navigator or the IRS’s Tax-Exempt Organization Search to verify the organization’s status.

2. EMPLOYEE EMBEZZLEMENT

Employee embezzlement fraud also increases during the holiday season because of the pressure to buy gifts, pay bills, or keep up with the neighbors.

COVID-19 forced many companies to move to a work-from-home model. Most companies are unfamiliar and unprepared for this monumental shift in the workplace.

Embezzlements and other white-collar crimes increase when employees are left unmonitored at home or if the company does not separate duties. As investigators, ask your victim businesses when they changed to a work-from-home model and what responsibilities the work-from-home employee has.

Police investigators should always be teachers. If you see an overlap in employee duties and those duties should be separated, tell the victim business. Education is the key to prevention.

3. SWEETHEART SCAMS

Sweetheart scams are the third most common COVID-related crime. Sweetheart scams increase during holiday seasons and directly after a disaster such as the COVID-19 pandemic.

Sweetheart scammers target emotions. The pressures from the holidays, COVID-19 stressors and even a sudden loss of a loved one will all leave a victim vulnerable to sweetheart scams. Scammers do not care about the victim. They do not care the victim is stressed, and they really do not care the victim just lost a loved one. They only care about money.

Just like charitable donation scams, investigators should always track the money. They should also ask often-forgotten questions like how long the relationship was and if the victim has recorded conversations or messages.

Investigators can also teach the victim simple ways of avoiding scammers, such as never sending money to someone they have never met in person.

4. RETAIL THEFT AND RETURN FRAUD

Retail theft has been around for a long time. People steal, and companies know it. That is why many companies hire loss prevention officers, especially around the holidays. Since COVID-19 mandates, many stores limit the number of patrons that remain inside their store. But what happens when companies limit the number of patrons in their stores. Does retail theft decrease? Not exactly.

Stores are forced to offer added online services like free curbside pickup, free two-day shipping and free extras to lure patrons to their online store. Credit card fraud, as you would expect, naturally increases with the increased online traffic. Retail theft is now shifting from in-person to online.

COVID also stoked the fire on return fraud. Return fraud is a newer type of fraud created because companies allowed receipt-less returns. Shoplifters would steal an item from the store then return it without a receipt for cash or credit. Return fraud was dramatically decreasing because companies started to require a receipt or proof of payment after losing tens of millions of dollars a year. Because of COVID restrictions, many companies relaxed their receipt policy to lure more patrons to their store.

Online discount codes and online coupons only make it worse. Organized criminals buy large amounts of products at a discounted or coupon rate, then return the items to the physical store for full credit. The 10% discount now becomes a 10% profit when returned. Criminals can also make online purchases using stolen credit cards, then return the item for store credit, gift cards, or cash.

I hope when you look at the beautiful white snow of winter, you think of white-collar crime. Yes, 2020 has been challenging for law enforcement, but don’t lose track of what is important. Have fun this holiday season, microwave the stale dinner rolls to make them softer and always be safe.

By Joshua Lee | Police1.com

About the author

Joshua Lee is an active-duty police sergeant for the City of Mesa (Arizona) Police Department. Before promoting, Lee served five years as a patrol officer and six years as a detective with the Organized Crime Section investigating civil asset forfeiture, white-collar financial crime and cryptocurrency crimes.

Lee is a cryptocurrency, money laundering and dark web consultant for banks, financial institutions and accountants throughout Arizona. He also serves as one of Arizona’s subject matter experts on cryptocurrency crimes and money laundering.

Lee holds a BA in Justice Studies, an MS in Legal Studies and an MA in Professional Writing. He has earned some of law enforcement’s top certifications, including the ACFE’s Certified Fraud Examiners (CFE) and the IAFC’s Certified Cyber Crimes Investigator (CCCI).

Lee is also an adjunct professor at a large national university and smaller regional college teaching, law, criminal justice, government and English courses. He instructs police in-service training and teaches at the regional police academy.

Photo by Casper Camille Rubin | Unsplash.com

Opioid Manufacturer Purdue Pharma Pleads Guilty to Fraud and Kickback Conspiracies

Opioid manufacturer Purdue Pharma LP (Purdue) pleaded guilty today in federal court in Newark, New Jersey, to conspiracies to defraud the United States and violate the anti-kickback statute.

Purdue pleaded guilty to an information charging it with three felony offenses: one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.

“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,”  said Deputy Attorney General Jeffrey A. Rosen.  “Today’s guilty pleas to three felony charges send a strong message to the pharmaceutical industry that illegal behavior will have serious consequences.  Further, today’s convictions underscore the department’s commitment to its multi-pronged strategy for defeating the opioid crisis.”

“Purdue admitted that it marketed and sold its dangerous opioid products to healthcare providers, even though it had reason to believe those providers were diverting them to abusers,”  said Rachael A. Honig, First Assistant U.S. Attorney for the District of New Jersey.  “The company lied to the Drug Enforcement Administration about steps it had taken to prevent such diversion, fraudulently increasing the amount of its products it was permitted to sell. Purdue also paid kickbacks to providers to encourage them to prescribe even more of its products.”

“As today’s plea to felony charges shows, Purdue put opioid profits ahead of people and corrupted the sacred doctor-patient relationship,” said Christina Nolan, U.S Attorney for the District of Vermont.  “We hope the company’s guilty plea sends a message that the Justice Department will not allow big pharma and big tech to engage in illegal profit-generating schemes that interfere with sound medicine.  We hope, also, that this guilty plea will bring some sense of justice to those who have suffered from opioid addictions involving oxycodone and some vindication for families and loved ones of those who did not survive such addiction.”

“This case makes clear that no company, including Purdue Pharma, whose actions harm the health and safety of the American public, is beyond the reach of law enforcement,”  said Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division.  “The opioid epidemic continues to spread across the United States impacting countless Americans and harming communities. Together with our law enforcement partners, the FBI is committed to investigating and holding criminals accountable for the roles they play in fueling this crisis.”

As part of today’s guilty plea, Purdue admitted that from May 2007 through at least March 2017, it conspired to defraud the United States by impeding the lawful function of the Drug Enforcement Administration (DEA).  Purdue represented to the DEA that it maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids.  Purdue also reported misleading information to the DEA to boost Purdue’s manufacturing quotas.  The misleading information comprised prescription data that included prescriptions written by doctors that Purdue had good reason to believe were engaged in diversion.  The conspiracy also involved aiding and abetting violations of the Food, Drug, and Cosmetic Act by facilitating the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.

Purdue also admitted it conspired to violate the federal Anti-Kickback Statute. Between June 2009 and March 2017, Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products.  Also, from April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products – OxyContin, Butrans, and Hysingla.

Under the terms of the plea agreement, Purdue agreed to the imposition of the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the company will pay $225 million within three business days following the entry of a judgment of conviction in accordance with the Plea Agreement.  The department is willing to credit the value conferred by the company to state and local governments under the department’s anti-piling on and coordination policy if certain conditions are met.

Purdue has also agreed to a civil settlement that provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim for recovery of $2.8 billion to resolve its civil liability under the False Claims Act.  Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

The criminal and civil resolutions, which were announced on Oct. 21, 2020, do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.

On Nov. 17, 2020, the bankruptcy court in the Southern District of New York approved the financial terms of the global resolution with the company.  The resolution includes the condition that the company cease to operate in its current form and instead emerge from bankruptcy as a public benefit company (PBC) or entity with a similar mission designed for the benefit of the American public.  The proceeds of the PBC will be directed toward state and local opioid abatement programs.  Based on the value that would be conferred to state and local governments through the PBC, the department is willing to credit up to $1.775 billion against the agreed $2 billion forfeiture amount.  The department looks forward to working with the creditor groups in the bankruptcy in charting the path forward for this PBC to best accomplish public health goals.

The global resolution does not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ or other third parties’ ability to recover any fraudulent transfers.

Except to the extent of Purdue’s admissions as part of its criminal resolution, the claims resolved by the civil settlements are allegations only.  There has been no determination of liability in the civil matters.

Photo by Michael Longmire | Unsplash.com

Beware of Possible Scam

Recently, the Livingston County Sheriff’s Office received promotional magnets with the sheriff’s office name and information from area businesses on them. The magnets came from a company by the name of FIVEFISH located at 109 S Elm St, Van, TX 75790.

The company sells advertisements to area business as if representing a sheriff’s office and to provide advertising for the office with local businesses.

This company may or may not be doing legitimate business. However, this is not an approved sheriff’s office project and there is a pattern of this type of misrepresentation as being affiliated with a local sheriff’s office.

https://www.ozarksfirst.com/local-news/bates-county-sheriffs-office-warns-against-scam-advertising-calls/

https://www.kwqc.com/content/news/Lee-County-Ill-Sheriffs-Dept-officials-warn-of-scam-494895701.html

https://thebrunswicknews.com/news/local_news/telephone-scam-in camden/article_196c20bb-e601-59a9-ba2d-2564831c054a.html

If you or anyone you know is contacted by a representative from FIVEFISH, do not give them money without contacting your local sheriff’s office first.

From Kevin Merritt
Executive director of the Missouri Sheriffs’ Association

Reporting Fraud Helps Everyone – and Now It’s Easier

Today the FTC launched ReportFraud.ftc.gov, a new website that makes it easy for people to report fraud, scams, and bad business practices.

Because you’re a trusted voice in your community, we’re hoping you can help us spread the word — and help us stop scams.

ReportFraud.ftc.gov/partners has tools you can use, including images (like the one below) and videos you can share on social media or add to your website. (The site is also available in Spanish at ReporteFraude.ftc.gov.)

ReportFraud.ftc.gov replaces FTCcomplaintassistant.gov. If your website links to that site, you’ll be redirected automatically, but please update it. Thank you for helping fight fraud! If you would like more information, contact Rosario Mendez at rmendez@ftc.gov.

​Check out what is going on in your state or metro area by visiting ftc.gov/exploredata

The FTC releases annual data based on reports provided by the public. Reports of fraud, identity theft and other consumer problems are reported in the Consumer Sentinel Network Data Book.

Justice Department Cautions Business Community Against Violating Antitrust Laws in the Manufacturing, Distribution, and Sale of Public Health Products

The Department of Justice today announced its intention to hold accountable anyone who violates the antitrust laws of the United States in connection with the manufacturing, distribution, or sale of public health products such as face masks, respirators, and diagnostics.  The department’s announcement is part of a broader administration effort to ensure that federal, state, and local health authorities, the private healthcare sector, and the public at large are in the strongest possible position to respond to the outbreak of the respiratory disease named coronavirus disease 2019 (COVID-19).

“The Department of Justice 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,” said Attorney General William P. Barr.  “I am committed to ensuring that the department’s resources are available to combat any wrongdoing and protect the public.”

Individuals or companies that fix prices or rig bids for personal health protection equipment such as sterile gloves and face masks could face criminal prosecution.  Competitors who agree to allocate among themselves consumers of public health products could also be prosecuted.  The department’s recently announced Procurement Collusion Strike Force will also be on high alert for collusive practices in the sale of such products to federal, state, and local agencies.

Anyone with information on price fixing, bid-rigging, market allocation schemes, or other anti-competitive conduct should call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.