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Triple-I Blog | The Senate panel faces COVID-19 fraud



Last week, the Senate Judiciary Committee held a hearing titled "COVID-19 Fraud: Law Enforcement's Response to Those Using the Pandemic."

The interrogation included testimony by William Hughes, Deputy Attorney General, U.S. Department of Justice; Craig Carpenito, U.S. Attorney, District of New Jersey; Calvin Shivers, Deputy Chief, Criminal Investigative Division, Federal Bureau of Investigation; and Michael D'Ambrosio, Deputy Director, U.S. Secret Service, Department of Homeland Security.

The testimony focused on the response to fraud that resulted from the COVID-1

9 pandemic. Examples included the sale of fraudulent personal protection equipment (PPE) and cyber-activated fraud; pricing and hoarding; and fraud related to CARES Acts Paycheck Protection Program (PPP).

Because demand for PPE has been greater than supply, the created environment has been "ripe for exploitation," Shivers said.

In addition to the sale of counterfeit PPEs, he cited "advance payment" programs – where a victim pays for goods such as fans, masks or cleansers that are never received – and BEC business email systems, which involve counterfeiting an e-mail. mailing address or use one that is almost identical to one entrusted by the victim to instruct them to direct money to fraudulent bank accounts.

Shivers said the FBI is working to educate "the healthcare industry, financial institutions, other private sector partners, and the American public about an increased potential for fraudulent activity involving the purchase of COVID-19-related medical devices."

He added that millions of units of PPE have been recovered from price increase and hoarding transactions and the FBI is working to determine the next step for how to redistribute or sell PPE.

D'Ambrosio said that although "criminals throughout history have taken advantage of emergency profits, the scams associated with the current pandemic COVID-19 present a scope and extent of risks we have not seen before."

He described four categories of threats:

  1. COVID-19-related fraud, including the sale of fraudulent medical equipment and fraud not supplied;
  1. Cybercrime as BEC, utilizes increased teleworking;
  1. Ransomware and other activities that may interfere with pandemic response; and
  1. Fraud by governments and financial institutions in connection with response and recovery efforts.

To date, Secret Service has launched over 100 criminal investigations, prevented about $ 1 billion in fraud losses and disturbed hundreds of online COVID-19-related fraud, said D & # 39; Ambrosio.


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