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PPE Fraud

COVID-19 Fraudsters & Federal Prosecutors Focus on PPE Fraud

COVID-19 has left an indelible mark on our nation, including in the healthcare and legal fields. One mark that has yet to fully form is the increasing number of investigations into those who received Small Business Administration Paycheck Protection Program forgivable loans. We discussed that in a previous blog. But that is not where the COVID-19 fraud ends.

Healthcare Fraud Involving Personal Protective Equipment

The COVID-19 pandemic has also caused the number of traditional healthcare fraud investigations and prosecutions to increase.

Federal investigators and prosecutors have rapidly opened cases into those allegedly:

  • Hoarding personal protective equipment (PPE),
  • Engaging in price gouging of PPE, and
  • Selling PPE that purportedly does not exist

In New York, federal prosecutors recently unsealed a complaint charging two men in California with conspiracy to sell $4 million worth of PPE that they did not possess. Federal prosecutors charged a man in New York, using the Defense Production Act (DPA), for hoarding PPE and selling the PPE at a price much higher than the fair market value. Federal prosecutors in Pennsylvania are using wire fraud charges to target people in Australia and Kuwait who allegedly conned U.S. brokers into trying to sell 39 million pieces of PPEs that allegedly did not exist. In the Pennsylvania case, it is too early to tell whether the U.S. brokers will be convicted.

According to the New York Times, the Department of Defense estimates that it has used the DPA approximately 300,000 times a year. While the federal case in New York is the first prosecution using the DPA, federal prosecutors are using traditional wire and mail fraud statutes to prosecute selling non-existent PPEs.

Task Forces Established to Fight Coronavirus-Related Fraud

People who claim they were victims of coronavirus-related fraud, including issues involving PPE, can report the matter on a Department of Justice website specifically developed for such accusations. Special task forces created by each U.S. Attorney’s office work with the DOJ’s fraud section to investigate and prosecute these cases. Thus, if you manufacture or sell PPEs, you may be subject to a healthcare fraud investigation.

In many cases, federal prosecutors will pursue healthcare fraud as false statement crimes. Unfortunately, they often use and abuse this statute. And even with substantial resources, they don’t always get their prosecutions right.

Invoking Your Right to Remain Silent

Remember: If you’re being investigated for a crime, you have the right to remain silent, and you do not have to voluntarily provide statements when law enforcement officials interrogate you. In a criminal case, the burden rests on the government to prove that a defendant has violated the law. Citizens are innocent until proven guilty, and they do not have to prove their innocence. Answering an investigator’s questions is equivalent to accepting the burden to prove innocence.

In 2001, the Supreme Court of the United States wrote:

“But we have never held, as the Supreme Court of Ohio did, that the privilege is unavailable to those who claim innocence. To the contrary, we have emphasized that one of the Fifth Amendment’s ‘basic functions’ to protect innocent men...‘who otherwise might be ensnared by ambiguous circumstances…’” The Court went on to say, “We recognized that truthful responses of an innocent witness, as well as those of a wrong-doer, may provide the government with incriminating evidence from the speaker’s mouth.”

We advise our clients to exercise their right to remain silent during investigations. Many who have followed this advice were never formally charged.

If a law enforcement official shows up at your door, you might feel inclined to answer their questions and try to prove your innocence. However, doing so could be detrimental to your case. Politely decline to give statements and contact a defense lawyer as soon as possible.

At the Law Offices of Horwitz & Citro, P.A., we work relentlessly to protect the rights and liberties of those accused of crimes. If you’re being investigated in Orlando or the surrounding areas, call us at (407) 901-5852 or contact us online today.