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Other Federal Enforcement Actions

					
Numerous federal agencies have authority to institute enforcement proceedings against wrongdoers.  These agencies include:


    

  • The Department of the Treasury and its divisions including the Financial Crimes Enforcement Network (FINCEN), which is responsible for safeguarding the U.S. financial system from illicit use and money laundering including through enforcement of the Bank Secrecy Act, and the Office of Foreign Assets Control (OFAC), which enforces economic and trade sanctions. Whistleblowers with knowledge of violations of the Bank Secrecy Act can submit a claim under the Anti-Money Laundering Whistleblower Program.  Violations of other laws enforced by the Department of Treasury may give rise to claims under different whistleblower reward programs.
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  • The Federal Trade Commission (FTC), which is charged with preventing anticompetitive, deceptive, and unfair business practices. The FTC can bring enforcement actions under U.S. antitrust laws and to stop unfair, deceptive and fraudulent business practices. The FTC does not have any authority to pay financial rewards to whistleblowers; however, conduct that is regulated by the FTC may also give rise to a claim under a different whistleblower reward program.
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  • The Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which regulates the offering and provision of consumer financial products or services under the federal consumer financial laws, and has the authority to bring enforcement actions against financial service providers. While the CFPB accepts tips from whistleblowers, and applicable laws offer whistleblowers protection from retaliation, there is currently no provision for CFPB whistleblowers to receive financial rewards. However, conduct that is regulated by the CFPB may also give rise to a claim under a different whistleblower reward program.
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  • The Environmental Protection Agency, which enforces federal environmental laws and regulations. The EPA does not currently have any authority to pay financial rewards to whistleblowers; however, conduct that is regulated by the EPA may also give rise to a claim under a different whistleblower reward program, and a number of federal environmental laws protect government or private employees reporting environmental violations under the statutes from retaliation.
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Below are summaries of recent settlements and successful enforcement actions involving these agencies. If you believe you have information about fraud which could give rise to a claim under a whistleblower reward program, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
July 27, 2017

				 The CFPB filed two complaints and proposed final judgments in federal court against four California-based credit repair companies and three individuals, Prime Credit, LLC, IMC Capital, LLC, Commercial Credit Consultants, Park View Law, known formerly as Prime Law Experts, Inc., Blake Johnson, Eric Schlegel, and Arthur Barens, for misleading consumers and charging illegal fees. The complaints allege that the companies not only charged illegal advance fees for credit repair services, but also misrepresented their ability to repair consumers’ credit scores. CFPB				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 11, 2017

				 Four paint companies have agreed to settle FTC charges that they deceptively promoted products as emission-free or containing zero volatile organic compounds, including during and immediately after application. Some promotions also made explicit safety claims regarding babies, children, pregnant women, and other sensitive populations. However, the FTC alleged, the companies had no evidence to support these claims. The four companies, Benjamin Moore & Co., Inc., ICP Construction Inc., YOLO Colorhouse, LLC, and Imperial Paints, LLC, have agreed to orders that would bar them from making unqualified emission-free and VOC-free claims unless, at all times during application and after, both content in and emissions from their paints are actually zero, or emissions are at “trace levels,” as defined in the orders. FTC				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 5, 2017

				 The FTC mailed 173,000 refund checks totaling more than $49 million to students in compensation for DeVry University’s allegedly misleading ads, which the Commission alleged deceived students about their likelihood of finding jobs in their field of study and the income level they could achieve upon graduation.  According to the FTC’s complaint, DeVry deceptively claimed that 90 percent of its graduates actively seeking employment landed jobs in their field within six months of graduation and that graduates had 15 percent higher incomes one year after graduation on average than the graduates of all other colleges or universities.  As part of the FTC’s $100 million settlement, the school agreed to pay $49.4 million to the FTC for partial refunds to some students and $50.6 million in debt relief. The debt forgiven included the full balance owed—$30.35 million—on all private unpaid student loans that DeVry issued to undergraduates between September 2008 and September 2015, and $20.25 million in student debts for items such as tuition, books and lab fees. FTC				 					 

						
Tagged in:
													  Education Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 23, 2017

				 The FTC has charged a North Carolina debt collection operation and its owner with taking money from consumers for fake debts they did not owe.  The action is part of the FTC’s crackdown on “phantom” debt collection.  According to the FTC, Anthony Swatsworth, ACDI Group LLC, and Solutions to Portfolios LLC bought phony payday loan debts – loans supposedly made by “500FastCash” – from SQ Capital through a debt broker, and continued to collect on those debts even after learning the debts were fake and receiving a full refund for their purchase.  Almost immediately after ACDI started collecting on the loans, consumers complained and provided evidence that they had never taken out a 500FastCash loan.  Other consumers complained that they did not have an outstanding balance.  When the defendants reported the complaints to the broker, the broker returned the defendants’ money and told the defendants to stop collecting on the phony debts.  Yet the defendants kept collecting from consumers for at least seven more months. FTC
				 			
	
		
		
	


 			




	
		
		

			

				
				
June 14, 2017

				 Following a public comment period, the FTC has approved a final order settling charges that outpatient kidney dialysis chain DaVita, Inc.’s $358 million acquisition of competitor Renal Ventures Management LLC would have been anticompetitive. First announced in March 2017, the complaint alleged that the acquisition would lead to significant anticompetitive effects in five New Jersey markets (Brick, Clifton, Somerville, Succasunna, and Trenton), and in two Dallas-area markets (Denton and Frisco). The complaint alleged that without the competition in these markets, and with new entry unlikely to be timely or sufficient, the likely result would be reduced quality and higher prices for dialysis patients. DaVita agreed to divest the seven clinics to PDA-GMF Holdco, LLC, a joint venture between Physicians Dialysis and GMF Capital LLC. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
June 7, 2017

				 The CFPB took action against mortgage servicer Fay Servicing for failing to provide mortgage borrowers with legally required protections against foreclosure. Fay violated the CFPB’s servicing rules by keeping borrowers in the dark about critical information about the process of applying for foreclosure relief. The CFPB also found instances where the servicer illegally launched or moved forward with the foreclosure process while borrowers were actively seeking help to save their homes. Fay Servicing will pay up to $1.15 million to harmed borrowers and must stop its illegal practices. CFPB				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 6, 2017

				 As the result of Do Not Call (DNC) litigation brought by the U.S. Department of Justice on behalf of the FTC, as well as the states of California, Illinois, North Carolina, and Ohio, a federal court in Illinois has ordered penalties totaling $280 million and strong injunctive relief against Englewood, Colorado-based satellite television provider Dish Network. The U.S. District Court for the Central District of Illinois found Dish liable for millions of calls that violated the FTC’s Telemarketing Sales Rule (TSR) — including DNC, entity-specific, and abandoned-call violations — the Telephone Consumer Protection Act (TCPA), and state law. The civil penalty award includes $168 million for the federal government, which is a record in a DNC case. The remainder of the civil penalty was awarded to the states. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
June 1, 2017

				 A Federal court has granted a request from the FTC and the State of Georgia to permanently bar the deceptive business practices of an electronics buyback company that misled consumers about the amount of money it would pay them for selling their used smartphones, tablets and other devices.  The court also ordered the company’s owner to pay more than $42 million. In granting the request for default judgement, the court agreed with the allegations in the FTC’s complaint that Laptop & Desktop Repair, LLC and its owner Vadim Olegovich Kruchinin earned millions by promising to buy back consumers’ used electronic devices for much more money than the defendants actually provided.  After consumers provided basic information on the company’s website about the type and condition of the electronic device they wanted to sell, the defendants would provide consumers with a quote for the amount a seller would receive for the device.  Yet once consumers sent in their devices to the defendants, the defendants dropped their offer price to as little as 3 percent to 10 percent of the original quote. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
May 31, 2017

				 Two brothers have agreed to settle FTC charges that in marketing and selling their trampolines, they deceived consumers by directing them to review websites that claimed to be independent but were not, and by failing to disclose that one of the brothers posted online product endorsements without disclosing his financial interest in the sale of the products.  Under an administrative consent order announced today, Son “Sonny” Le and Bao “Bobby” Le are barred from engaging in such deceptive behavior in the future and must clearly and conspicuously disclose any material connections between a reviewer or endorser and the product being reviewed. According to the FTC’s complaint, working together and using several fictitious business names, the Les marketed and sold Infinity and Olympus Pro brand trampolines on several websites. These sales websites prominently featured logos from supposedly independent review entities, including “Trampoline Safety of America,” the “Bureau of Trampoline Review,” and “Top Trampoline Review.” FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
May 26, 2017

				 Following a public comment period, the FTC has approved a final order and consent agreement in which the American Guild of Organists agreed to eliminate rules that restrict its members from competing for opportunities to perform.  Announced in March 2017, the agreement between the FTC and the American Guild of Organists resolves the agency’s complaint that the guild’s rules restrained competition and harmed consumers in violation of the FTC Act.  Under the guild’s code of ethics, if a consumer wished to have someone other than an “incumbent musician” play at a venue for a wedding, funeral or other service, the consumer was required to pay both the incumbent and the consumer’s chosen musician. The guild also developed and publicized compensation schedules and formulas, and instructed its chapters and members to develop and use regionally applicable versions to determine charges for their services. FTC				 			
	
		
		
	


 			


											

						

								

									
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