For today’s Daily COVID-19 Report, PERF Executive Director Chuck Wexler spoke with officials from the FBI and ICE Homeland Security Investigations about potential vaccine-related frauds and what local law enforcement agencies should do if they see evidence of these frauds occurring.

FBI Financial Crimes Section Chief Steven Merrill

We’ve spent the better part of this year investigating frauds related to the CARES Act. Like all local, state, and federal agencies, we’ve been very busy handling those complaints, turning them into cases, and prosecuting those cases. Our means for collecting complaints from the public on the internet, IC3.gov, has tens of thousands of these complaints.

Right now we’re in a new phase, looking at potential frauds that will start popping up related to the vaccine and its distribution. Although we haven’t had very many complaints yet, we’re expecting many of them in the near future.

We encourage the public, and local, state, and federal law enforcement agencies around the country, to keep their eyes and ears open and notify us when they become aware of vaccine fraud schemes. We’re worried about people using the phone, email, or social media to promise the vaccine and charge people for it. We’re looking at health care fraud, such as doctors and other medical professionals who may be asking patients to undergo additional medical testing or procedures. And we’re looking at any marketing use that takes advantage of the access to the vaccine, whether it’s domestic or international.

Chuck Wexler: What should people be looking for?

Section Chief Merrill: A lot of it is just general due diligence. These are extraordinary times, and people tend to act more emotionally than rationally, which is to be expected. We all want COVID behind us. So we advise people to consult their state health department website for up-to-date information about the distribution of the vaccine, as well as checking the FDA’s website for current information about the vaccine. And, most importantly, consult with your primary care physician before undergoing any vaccinations, and learn what you should expect.

Don’t share your personal or health information with anyone other than known and trusted medical professionals. Review bills and insurance benefits to keep an eye out for any suspicious claims and activity. And follow guidance from the CDC as they update and educate the public about when the vaccine will be available and what you should know about it.

Wexler: You said you’ve received tens of thousands of complaints about COVID-related fraud already?

Section Chief Merrill: Yes, I’m afraid so. With the CARES Act, we’re talking about two trillion dollars, and now we’re talking about close to another trillion. The scope of this problem is so large that it really does involve just about every law enforcement agency in the country, to some extent. Whether it’s frauds related to the Paycheck Protection Program or unemployment insurance, if criminals have an opportunity to take advantage of a program, they will. The CARES Act fraud just exploded because of the enormous scope of the paycheck protection and economic impact payments and the need to get this money on the streets as soon as possible.

Wexler: What should a local law enforcement agency do when they receive a COVID-related fraud complaint?

Section Chief Merrill: We have 56 FBI field offices. Each office works hand-in-hand with their state, local, and other federal partners. In the case of financial crimes, we work as task forces around the country.  I ask local agencies to get in touch with their local FBI field offices. We will pair you up with an agent or analyst. We firmly believe that these cases should be worked in group environments, and we want to thank all our partners, particularly this year.

Homeland Security Investigations Assistant Director Steve Francis

Wexler:  Steve, tell us about your job and what you do.

Assistant Director Francis:  I’m the Assistant Director for Homeland Security Investigations (HSI) in the Global Trade Division, and I’m also the Director of the National Intellectual Property Rights (IPR) Coordination Center. The IPR Center has been in existence for over a decade, and it handles the U.S. government’s response to intellectual property theft and the enforcement of its international trade laws. The deputy directors of the IPR Center come from the FBI and Customs and Border Protection (CBP). We have 25 interagency and 5 international law enforcement partners to combat unapproved, illicit, and counterfeit products coming into the United States. We also have very robust public/private partnerships. We focus on three priorities: national security, economic security, and, most importantly, the health and safety of the American public.

When the COVID pandemic struck, we immediately began to pivot towards all the illicit goods. In January and February, we saw China decrease its exportation of PPE. Then we saw a huge demand for PPE and anything related to the coronavirus. Agencies with the local, state, and federal government, as well as many others, were attempting to make those purchases anywhere they could. They started entering a supply chain that was the wild, wild West.

At the IPR Center, we realized that it was much more than just stopping the illicit goods, such as counterfeit and non-FDA approved test kits and other products, from coming into the United States. From HSI’s perspective, we needed to bring in our expertise from our financial, cyber, and international operations divisions.

Working with our federal, state, and local partners, we launched Operation Stolen Promise. We really leveraged our relationship with CBP at the ports of entry. We initially saw counterfeit or unapproved PPE, antiviral products, and pharmaceuticals. Federal prosecutors put all hands on deck for any coronavirus fraud. We initiated over 700 investigations. We had over 1,600 individual seizures that resulted in millions and millions of seized products that were counterfeit or hazardous. With our cyber division, we analyzed over 70,000 internet domains that were suspected of fraud. And we executed 186 criminal arrests and 48 indictments.

We saw the evolution of fraud. First we saw the goods, then we saw cybercrimes, and now we’re seeing a big increase in financial fraud investigations towards both unemployment insurance and the Payroll Protection Program.

Wexler: What are your concerns about vaccine-related fraud?

Assistant Director Francis: We work very closely with the pharmaceutical companies. We kicked off Operation Stolen Promise 2.0. Two weeks ago, we seized a significant amount of remdesivir, which is a coronavirus treatment, that was not approved by the FDA. We launched a criminal investigation into that matter.

And in Maryland, HSI and the U.S. Attorney’s Office seized two websites that spoofed pharmaceutical companies’ websites. They made identical websites that violated trademarks to mislead the American public. And they changed the contact information and other information on there. So if a member of the public went on that site, the personal or financial information they provided would probably be used for some type of financial fraud scheme. 

The pharmaceutical companies are providing us with information about what they’re seeing to support some of their efforts to stop vaccine-related fraud and cybercrimes.

Wexler: What other concerns do you have?

Assistant Director Francis: Right now we have a pretty secure supply chain for the Pfizer and Moderna vaccines. There’s not a lot of accessibility to the public. But there are over 200 different companies seeking FDA approval for vaccinations or treatments, and only those two currently have FDA emergency use authorization.

Unfortunately, people are going to be defrauding others. What could be harmful or deadly is if individuals purchase fake vaccines or treatments over the internet.  We want to send the message that everyone should consult their own physician or other licensed medical professional  prior to receiving any vaccines or treatments.

I’m also concerned about home test kits for the COVID virus that will ultimately be approved for usage. We have to make sure that those are not fraudulent or counterfeit.

We don’t want people to respond to any unsolicited texts, emails, or things they see on social media. Those can mislead about vaccines and treatments.

We have been working with state and local law enforcement since Day 1. Most people reporting fraud are contacting their state or local law enforcement agency, so HSI and the FBI offices are there to work with those agencies. For example, if a local law enforcement agency is made aware of a treatment or vaccination they have questions about, we have a direct connection with Pfizer, Moderna, and the other pharmaceutical companies and can assist law enforcement in determining if it’s an approved or fraudulent vaccination or treatment.

Wexler: How should state and local law enforcement agencies get in touch with your offices?

Assistant Director Francis: We have all our contact information on our website at IPRCenter.gov, and that would probably be the best way to get in touch with us. We also have an email address: [email protected]. 

The PERF Daily COVID-19 Report is part of the Critical Issues in Policing project, supported by the Motorola Solutions Foundation.

PERF also is grateful to the Howard G. Buffett Foundation for supporting PERF’s COVID-19 work.