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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.

				

			

			
						
					
			

	
		
		

			

				
				
March 31, 2017

				 Following a public comment period, the Federal Trade Commission has approved final consent orders with CarMax, Asbury Automotive Group and West-Herr Automotive Group, settling charges that they touted how rigorously they inspect their used cars, yet failed to adequately disclose that some of the cars were subject to unrepaired safety recalls.  The final orders announced today prohibit CarMax, Asbury and West-Herr from claiming that their used vehicles are safe, have been repaired for safety issues, or have been subject to a rigorous inspection, unless they are free of open recalls, or the companies clearly and conspicuously disclose that their vehicles may be subject to unrepaired recalls for safety issues and explain how consumers can determine a vehicle’s recall status. The orders also prohibit the companies from misrepresenting material facts about the safety or recall status of the used cars they advertise. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
March 24, 2017

				 The FTC has charged a group of online marketers with deceptively luring consumers with “free” and “risk-free” trials for cooking gadgets, golf equipment, and access to related online subscription services.  According to the FTC, the defendants asked people for their credit card information to cover shipping and handling, and then charged them for products and services without their consent. The FTC’s complaint alleges that Brian Bernheim, Joshua Bernheim, Jared Coates, Robert Koch AAFE Products Corp., JBE International LLC, BSDC Inc., KADC Inc., Purestrike Inc., and BNRI Corp., formerly known as Bernheim and Rice Inc., violated the FTC Act and the Restore Online Shoppers’ Confidence Act.  According to the complaint, the defendants’ websites, TV infomercials and email deceived consumers by prominently claiming that their products and services were free, without clearly disclosing that they would start charging consumers if they did not cancel their “free trial” or return the “free” products. They also misrepresented their return, refund and cancellation policies. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
March 23, 2017

				 The CFPB took action against Experian and its subsidiaries for deceiving consumers about the use of credit scores it sold to consumers. Experian falsely claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. The CFPB ordered Experian to truthfully represent how its credit scores are used and pay a civil penalty of $3 million. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
March 17, 2017

				 Three Florida-based affiliate marketers charged with using illegal spam e-mail, false weight-loss claims, and phony celebrity endorsements to market bogus weight-loss products will pay $500,000 to settle FTC charges. The court order resolving the FTC’s allegations also prohibits the defendants from the illegal advertising and marketing tactics alleged in the complaint.  According to the FTC’s June 2016 complaint, Colby Fox; his companies, Tachht, Inc. and Teqqi, LLC; and a fourth defendant paid affiliate marketers to send consumers millions of illegal spam emails from hacked email accounts, making it appear that the messages came from the consumers’ family members, friends, or other contacts. The email messages appeared to be a quick note from a family member or friend, passing along a link to an interesting news story. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
March 15, 2017

				 The CFPB ordered Nationstar Mortgage LLC to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014. This is the largest HMDA civil penalty imposed by the Bureau to date. In addition, Nationstar must take the necessary steps to improve its compliance management and prevent future violations. CFPB				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 14, 2017

				 Sage Automotive Group – nine Los Angeles-based auto dealerships, their holding and management companies, and two individuals – has agreed to pay more than $3.6 million for return to consumers in order to settle FTC charges that it used deceptive and unfair sales and financing practices, deceptive advertising, and deceptive online reviews.  The proposed settlement order, which will be filed in the U.S. District Court for the Central District of California for approval, will prohibit the defendants from making misrepresentations relating to their advertising, add-on products, financing, and endorsements or testimonials. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
March 7, 2017

				 A debt relief company and its principals who allegedly misled consumers and charged illegal advance fees will be banned from those practices under a settlement with the FTC.  According to the FTC’s complaint, United Debt Counselors LLC exaggerated how much money people would save using its services. The company’s direct mail ads, which reached up to 100,000 consumers per week, looked like official documents from a bank or attorney, and claimed that typical customers would have their credit card debt cut in half and become debt-free within 36 months. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
March 3, 2017

				 The FTC has approved a final order settling charges that OFTACOOP, a Puerto Rican ophthalmologist cooperative, unlawfully orchestrated an agreement among competing ophthalmologists to refuse to deal with a health plan, MCS Advantage, Inc., and its network administrator, Eye Management of Puerto Rico, LLC.  First announced in January 2017, the complaint alleged that OFTACOOP’s concerted refusal to deal forced MCS to abandon its plan to engage Eye Management to create a lower-cost network of ophthalmologists. MCS was also forced to maintain its then-current reimbursement rates paid to ophthalmologists. According to the complaint, OFTACOOP – also known as Cooperativa de Médico Oftalmólogos de Puerto Rico – restrained competition without any justification, in violation of federal antitrust law. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
February 23, 2017

				 The final defendant in an alleged mortgage relief scam that preyed upon distressed homeowners will be banned from selling mortgage or debt relief services under a settlement with the FTC. The settlement resolves FTC charges against Gabriel D. Stewart in a scheme that operated under the fictitious names “2Apply” and “UW Solutions.” The defendants falsely claimed they could lower consumers’ mortgage payments and interest rates or prevent foreclosure, pretended to be affiliated with a government agency or consumers’ lenders or servicers, and illegally charged advance fees. The case was brought in July 2014 as part of a federal-state law enforcement effort, Operation Mis-Modification. FTC				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 22, 2017

				 Three U.S. companies have agreed to settle Federal Trade Commission charges that they deceived consumers about their participation in the Asia-Pacific Economic Cooperation (APEC) Cross-Border Privacy Rules (CBPR) system. FTC

In separate but similar 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				 			
	
		
		
	


 			


											

						

								

									
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