Fraudsters are Cashing in On People’s Pandemic Fears: FBI
Wed, April 21, 2021

Fraudsters are Cashing in On People’s Pandemic Fears: FBI

Fraudsters are actively manipulating the Covid-19 outbreak to their advantage, US law enforcement agency Federal Bureau of Investigation warns. / Photo by: Aquarius Studio via Shutterstock

 

Fraudsters are actively manipulating the Covid-19 outbreak to their advantage, US law enforcement agency Federal Bureau of Investigation warns.

FBI’s assistant director of Criminal Investigative Division Calvin A. Shivers said in a statement that criminals are seeking to take advantage of people’s fears amid the pandemic and that the FBI is asking all Americans to stay vigilant and avoid falling victim into the criminals’ schemes.

The call to stay vigilant during the pandemic

The feds added that bad actors have been selling unapproved treatments and fake Covid-19 test kits through door-to-door visits, social media platforms, and telemarketing calls. There are even scammers who promise to provide free care to unsuspecting patients although it is just a trick to get their health insurance and personal information, such as their financial information, Social Security numbers, and their birth date.

The statement also reads that people should beware of those who they don’t know but contact them in person, by email, or through phone, to tell them that government officials or the government have told them to undergo the Covid-19 test. These scammers will likely collect the person’s Medicaid or Medicare number and other personal data and once they have this information in their hands, they can use it to bill the private health insurance plans or federal health care programs for the procedures and tests that the individual did not even receive. Then, they will use the proceeds to their advantage.

Legitimate Covid-19 tests, the FBI warns, are offered free to patients and this should be done by a healthcare professional. In a report published by the New York Post, there are also snake-oil salesmen in the country selling miracle cures for Covid-19 although not a proven form of treatment.

Disrupting fraud involving the sale of millions of N95 masks

The authorities have already caught several fraudsters who were cashing in on the health crisis. They are also investigating an international Covid-19-related scam that tricked a healthcare union in California into a deal for hospitals to purchase 39 million N95 face masks.

Pennsylvania-based prosecutors and the FBI uncovered the scam while they were determining whether the PPEs could be seized under the US Defense Production Act. The same law was invoked by President Trump to deal with the shortage of critical medical supplies caused by the Covid-19 pandemic. The Defense Production Act was passed at the start of the Korean War in 1950, giving former President Franklin Delano Roosevelt the authority to control the domestic economy during the war. Among the powers granted to President Roosevelt, at that time, was the ability to set prices and ration of consumer goods.

The present version of the Defense Production Act still allows the President to direct private firms to prioritize the orders from the government for them to allocate facilities, services, and materials for purposes of national defense, as explained by the Council for Foreign Relations.

Among the organizations that were supposed to purchase the N95 masks from fraudsters was the Greater New York Hospital Association, which represents over 160 healthcare systems and hospitals across the state. The alleged fraudster tried to profit from the hospitals by offering millions of nonexistent face masks.

Christopher Parris, 39, of Atlanta, is now facing a charge of wire fraud for attempting to sell 125 million masks and other protective gear to the Department of Veterans Affairs although he did not have the supply. The accused promised he has “genuine” masks manufactured by healthcare particulate respirators and surgical masks maker 3M.

 

Among the organizations that were supposed to purchase the N95 masks from fraudsters was the Greater New York Hospital Association. / Photo by: sunfe via Shutterstock

 

Bogus companies making profit online

In the UK, firms and individuals have also lost over £1.86m to Covid-19-related frauds made online. Police revealed that most of the bogus companies are selling nonexistent sanitizers and face masks online. Scam websites are targeting care homes, hospitals, and businesses seeking to purchase the items in bulk.

 

 

Coronavirus cryptocurrency scams

The FBI has further pointed out the increasing number of coronavirus cryptocurrency scams. The law enforcement agency said that these fraudsters are stealing people’s money and have no regard for the victims’ age. After stealing the money, the scammers launder it through the cryptocurrency ecosystem.

These fraudsters are tailoring their sales pitch to the health crisis, like posting as remote workers and collecting donations from people through email. The FBI warns people to consider it a red flag if “charities” online take cryptocurrency or if safety equipment vendors are working beyond their established e-commerce platform. The online scams may also come in the traditional form, such as “blackmail with a twist.” An example of this is that the fraudster will threaten to infect a person or his or her family with Covid-19 if they will not pay through a bitcoin wallet.

The FBI advises internet users to use “common sense” by verifying if the vendors are legitimate and by being careful of giving their bank details online. If there are attempts of extortion and blackmail, report it to law enforcement as well.

VoIP providers warned not to facilitate coronavirus scams

A total of nine Voice over Internet Protocol (VoIP) providers have also been warned by the US Federal Trade Commission against facilitating and assisting illegal robocalls meant to capitalize on people’s anxiety surrounding the pandemic. These companies include VoIPTerminator Inc, Third Rock Telecom, VoIPMax, Voxbone US LLC, SipJoin Holding Corp, J2 Web Services Inc, Bluetone Communications LLC, iFly Communications, and Comet Media Inc. So far, $12.78 million were lost Covid-19-related scams. This is based on the complaints received by FTC since January 2020.

The top fraud products of services in 2020 according to the number of reports and dollars lost are travel/vacations (2,814 reports and $4,686k loss), online shopping (1,471 and $1,434k), mobile: text messages (1,017 and $76k), internet information services (385 and $171k), and impostor: business (372 and $1,188k).

FTC said that they received more than 1.4 million fraud reports in 2018, a 38% increase from its 2017 data. Top records were identity theft, debt collection, and imposter scams. The scammers prefer to get money through wire transfer. In another survey conducted by database company Statista involving 2,030 respondents age 18 and older, a total of US$8.6 billion were lost to phone scams in the US and $10.5 billion in 2019.

People should take extra care during this period to avoid falling victim to these coronavirus-themed scams.