The Department of Justice (DOJ) announced a criminal complaint last Friday in the most significant COVID-19 fraud prosecution to date. A complaint is a charging document usually submitted to a court to obtain an arrest warrant. It is not an indictment, and, unless an early resolution is reached, in order to pursue the case further DOJ will have to present the case to a grand jury to vote on charges (whenever grand juries are once again in session).
DOJ alleges in the complaint that an Atlanta, Georgia man made misrepresentations to the Department of Veterans Affairs (VA), telling the VA he could deliver millions of 3M face masks and other personal protective equipment when, according to DOJ, "he knew fulfilling the orders would not be possible." The total price tag for the offered but allegedly unavailable equipment was over $750 million. It is not clear from DOJ's release whether the suspect actually obtained anything as a result of his alleged misrepresentations. DOJ brought the case in the District Court for D.C., and it has attorneys on the case from both DOJ's main office as well as the U.S. Attorney's Office for the District of Columbia. The press release included a comment from Attorney General William Barr, showing that this particular matter reached the attention of the highest levels of DOJ, which is rare and was surely meant as a sign of how seriously DOJ is taking the case.
This case is undoubtedly the tip of the iceberg for DOJ as it relates to COVID-19 cases. Times of crisis have, historically, led to substantial schemes and huge numbers of prosecutions. For example, within three years of Hurricane Katrina a special DOJ Fraud Task Force brought charges against more than 900 individuals in 43 federal judicial districts. The cases included a wide range of charges involving contract fraud, embezzlement, charity fraud, and identity theft.
As it relates to COVID-19, undoubtedly DOJ has only just begun to fight. But after-the-fact prosecutions are, ultimately, not particularly helpful to victims. In times like this current crisis, everyone, from large government entities, to private companies of all sizes, to individuals, must take significant care in their dealings. Crisis always breeds desperation and creates opportunities for abuse, and vigilance in compliance and enforcement is a must now more than ever.