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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.

				

			

			
						
					
			

	
		
		

			

				
				
May 25, 2017

				 The FTC charged the operators of a phony student loan debt relief and credit repair scheme with bilking millions of dollars from consumers by falsely promising to reduce or eliminate their student loan debt and offering them non-existent credit repair services.  At the FTC’s request, a federal court has temporarily halted the operation. The agency seeks to permanently stop the alleged illegal practices and obtain refunds for affected consumers.  According to the FTC’s complaint, the operators of Strategic Student Solutions and related companies lured student loan borrowers with promises such as “Payments as low as $0 Monthly” or “Save 60 percent or MORE on your monthly payment.” According to the FTC’s complaint, SSS operators told the student loan borrowers they would be enrolled in a loan forgiveness or payment reduction program, and that their monthly payments would be applied to their loans. However, in many cases, consumers discovered that the defendants failed to enroll them in any loan forgiveness or payment reduction programs, and found out that none of their monthly payments were applied to their student loan debt. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
May 12, 2017

				 The FTC, along with federal, state and international law enforcement partners, today announced “Operation Tech Trap,” a nationwide and international crackdown on tech support scams that trick consumers into believing their computers are infected with viruses and malware, and then charge them hundreds of dollars for unnecessary repairs.  As part of this coordinated effort, the FTC and its partners are announcing 16 new actions, including complaints, settlements, indictments, and guilty pleas, against deceptive tech support operations. This brings to 29 the number of law enforcement actions brought by Operation Tech Trap partners in the last year to stop tech support scams. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
May 4, 2017

				 A company that marketed itself as “the leader in home opiate detox since 2009” and its CEO have settled FTC charges that the withdrawal treatment claims for their “Withdrawal Ease” and “Recovery Ease” products were false or unsupported by scientific evidence.  The court order settling the FTC’s charges bars Catlin Enterprises, Inc. and George Catlin, based in Austin, Texas, from making claims about opiate withdrawal, opiate dependency, or other health conditions, including through their product names, unless they possess competent and reliable science to back up those claims. “Opioid addiction is a scourge that has affected millions of Americans,” said Acting FTC Chairman Maureen K. Ohlhausen. “People who struggle with this problem need real help, not phony claims and false promises like the ones peddled by these defendants.” FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 27, 2017

				 The CFPB took action against four online lenders – Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. – for deceiving consumers by collecting debt they were not legally owed. The complaint was filed in federal court and alleges that the four lenders could not legally collect on these debts because the loans were void under state laws governing interest rate caps or the licensing of lenders. It also alleges that the lenders made deceptive demands and illegally took money from consumer bank accounts for debts that consumers did not legally owe. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
April 26, 2017

				 April 26 – The CFPB took action against Security National Automotive Acceptance Company (SNAAC), an auto lender specializing in loans to servicemembers, for violating a Bureau consent order. In 2015, the CFPB ordered SNAAC to pay both redress and a civil penalty for illegal debt collection tactics, including making threats to contact servicemembers’ commanding officers about debts and exaggerating the consequences of not paying. SNAAC failed to provide more than $1 million in refunds and credits, affecting more than 1,000 consumers. The CFPB’s order requires SNAAC to make good on the redress it owes to those consumers and pay an additional $1.25 million penalty. CFPB				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 24, 2017

				 At the FTC’s request, a federal court has ordered Timothy L. Ford, the president of Commercial Recovery Systems Inc. (CRS), to pay a $2 million civil penalty for violating the Fair Debt Collection Practices Act by falsely threatening debtors.  The court judgment resolves a case filed on the FTC’s behalf by the Department of Justice in January 2015, alleging that CRS’s collectors falsely claimed the company would sue debtors, garnish their wages, levy their bank accounts, or seize their property unless their debts were paid. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 20, 2017

				 The CFPB sued one of the country’s largest nonbank mortgage loan servicers, Ocwen Financial Corporation, and its subsidiaries for years of widespread errors, shortcuts, and runarounds that cost some borrowers money and others their homes. Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. Allegedly, Ocwen also illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records. CFPB				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 18, 2017

				 The FTC has approved final consent orders settling charges that iSpring Water Systems, LLC, a Georgia-based distributor of water filtration systems, and Block Division, Inc., a Texas-based distributor of pulley block systems, made misleading Made-in-the-USA claims.  The FTC’s complaint against iSpring alleged that the company’s unqualified claims that its products are built in the United States deceived consumers.  In many instances – despite iSpring’s false, misleading or unsupported claims – its products either are wholly imported or are made using a significant amount of inputs from overseas.  The FTC’s complaint against Block Division alleged that for a period of several years, the company’s pulleys featured imported steel plates that were stamped “Made in USA” before they entered the United States. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 14, 2017

				 The FTC has approved final orders with three companies resolving allegations that they deceived consumers by misrepresenting their participation in the Asia-Pacific Economic Cooperation (APEC) Cross-Border Privacy Rules (CBPR) system.  The APEC CBPR system facilitates privacy-respecting data transfers between APEC member economies through a voluntary, enforceable mechanism, which certifies companies as being compliant with APEC CBPR program requirements. Like the EU-U.S. and Swiss-U.S. Privacy Shield frameworks that also facilitate privacy-respecting data transfers between different countries, the APEC CBPR system is backstopped by FTC enforcement.  In separate complaints, the FTC charged that Sentinel Labs, Inc., which provides endpoint protection software to enterprise customers, SpyChatter, Inc., marketer of the SpyChatter private message app, and Vir2us, Inc., which distributes cyber security software, falsely represented in their online privacy policies that they participated in the APEC CBPR system. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 4, 2017

				 The FTC and Amazon Inc. have agreed to end appeals related to last year’s court findings that the company billed consumers for unauthorized in-app charges incurred by children, paving the way for affected consumers to seek refunds from the online retailer shortly.  A federal district court found in April 2016 that Amazon billed consumers for unauthorized in-app charges incurred by children using mobile apps such as online games downloaded through the company’s app store. The court found that Amazon failed to get parents’ consent for in-app charges made by their children. FTC				 			
	
		
		
	


 			


											

						

								

									
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