The Department of Justice has mobilized prosecutors and investigators to look for fraud related to the current COVID-19 Coronavirus outbreak. On Monday, March 16, 2020, Attorney General William Barr directed all U.S. Attorneys nationwide to prioritize the detection, investigation, and prosecution of criminal conduct related to the current pandemic. "The pandemic is dangerous enough," the Attorney General said, "without wrongdoers seeking to profit from public panic and this sort of conduct cannot be tolerated." A link to the Attorney General’s memo can be found here.
Following Attorney General Barr’s instruction, several U.S. Attorneys’ Offices, including the Western District of Oklahoma, the Western District of Pennsylvania, and the Districts of Nevada and Maine, already have set up special task forces or appointed special prosecutors to fight COVID-19 fraud. Other U.S. Attorneys, including Maryland U.S. Attorney Robert K. Hur have issued stern warnings about the possibilities of “scammers exploiting the coronavirus health emergency.” U.S. Attorneys in the District of Massachusetts and the Northern District of Oklahoma issued similar alerts, urging citizens who believe they may be potential victims of such fraudulent schemes to contact the appropriate authorities. Signaling the broad scope of DOJ’s review, the Attorney General noted that DOJ’s Criminal Division, Antitrust Division and Civil Division’s Consumer Protection Branch are all designated as resources to provide guidance to investigators.
Federal, state and local law enforcement authorities can be expected to deploy their full array of legal tools to address allegations of fraud and related misconduct. Especially now that government agencies are actively engaged with health care providers, pharmaceutical manufacturers and distributors and other contractors related to the continually evolving virus threat, the possibility of future investigations arising from current and ongoing response efforts is very real. Contractors should evaluate carefully the veracity and supportability of any claims for payment submitted to governmental authorities, as knowing errors or misrepresentations could give rise to federal or state False Claims Act or even criminal fraud investigations. Similarly, contractors should thoroughly review their cost and pricing disclosures to avoid possible exposure under the Truthful Cost or Pricing Data Act (commonly referred to by its historical name, the Truth in Negotiations Act or “TINA”). We cannot over-emphasize the importance of maintaining adequate records, especially in the current environment. As investigations and enforcement actions increase, adequate records will help support contractor claims for payment and protect contractors from allegations of misconduct.
Our firm will continue to monitor these trends and is available to assess legal compliance and investigations as well as general developments in the governmental investigations arena. We are also keeping a close eye on law enforcement actions related to the Coronavirus pandemic.
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