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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.

				

			

			
						
					
			

	
		
		

			

				
				
February 10, 2017

				 The operators of two online “high schools” have agreed to settle FTC charges that they falsely claimed to be accredited schools but actually were little more than diploma mills that sold worthless pieces of paper.  The settlements resolve charges the FTC brought in February 2016 against Capitol Network Distance Learning Programs and Stepping Stonez Development, LLC, two separate diploma mills that used names like Capitol High School, Aberdeen Academy, West Madison Falls High School, Columbia Northern High School, and Heritage Western High School.  Under the terms of the settlements, the defendants are banned from marketing or selling any academic degree or certification programs. The orders also prohibit them from making misrepresentations about any product or service, including claims about the performance of any product or service, the use of testimonials, and accreditations or endorsements. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
February 7, 2017

				 The CFPB and New York Attorney General filed a lawsuit against RD Legal Funding, LLC, two related entities, and Roni Dersovitz, the companies’ founder and owner, for allegedly scamming 9/11 heroes and National Football League (NFL) concussion victims. The complaint alleges that the illegal scheme deceived 9/11 first responders with cancer and other illnesses and football players with brain injuries out of millions of dollars by luring them into costly advances on settlement payouts with lies about the terms of the deals. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
February 6, 2017

				 VIZIO, Inc., one of the world’s largest manufacturers and sellers of internet-connected “smart” televisions, has agreed to pay $2.2 million to settle charges by the FTC and the Office of the New Jersey Attorney General that it installed software on its TVs to collect viewing data on 11 million consumer TVs without consumers’ knowledge or consent.  The stipulated federal court order requires VIZIO to prominently disclose and obtain affirmative express consent for its data collection and sharing practices, and prohibits misrepresentations about the privacy, security, or confidentiality of consumer information they collect. It also requires the company to delete data collected before March 1, 2016, and to implement a comprehensive data privacy program and biennial assessments of that program. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
February 2, 2017

				 The CFPB and Virginia Attorney General took action today against Woodbridge Coins and Jewelry Exchange, Inc. for deceiving consumers about the actual annual costs of its loans. The complaint is accompanied by a proposed consent order which, if approved, would require Woodbridge Gold & Pawn to pay $79,000 in consumer relief and penalties and end deceptive disclosures. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
February 1, 2017

				 The CFPB took action against Mastercard and UniRush for breakdowns that left tens of thousands of economically vulnerable RushCard users unable to access their own money to pay for basic necessities. In October 2015, a rash of preventable failures by Mastercard and UniRush prevented many customers from using their RushCard to get their paychecks and other direct deposits, take out cash, make purchases, pay bills, or get accurate balance information. UniRush then failed to provide customer service to many consumers who reached out for help during the service breakdown. Mastercard and UniRush will pay an estimated $10 million in restitution to tens of thousands of harmed customers and a fine of $3 million. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
February 1, 2017

				 The FTC announced a settlement today that requires Volkswagen Group of America to fully compensate consumers who purchased 3.0-liter TDI diesel vehicles through a combination of repairs, additional monetary compensation, and buybacks for certain models.  Under the federal court order, owners of older vehicles will be able to sell their car back to Volkswagen at favorable prices and obtain full compensation for their losses. Consumers are eligible to receive approximately $26,000 to $58,000 for a buyback, depending on the model, mileage, and trim of the car. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
January 31, 2017

				 The CFPB took action against Prospect Mortgage, LLC, a major mortgage lender, for paying illegal kickbacks for mortgage business referrals, and two real estate brokers and a mortgage servicer that took illegal kickbacks from Prospect. Prospect will pay a $3.5 million civil penalty for its illegal conduct, and the real estate brokers and servicer will pay a combined $495,000 in consumer relief, repayment of ill-gotten gains, and penalties. CFPB
				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 30, 2017

				 The CFPB took action against a group of law firms and attorneys that worked together to charge illegal fees to consumers seeking debt relief. The complaint alleges Howard Law, P.C., the Williamson Law Firm, LLC, and Williamson & Howard, LLP, attorneys Vincent Howard and Lawrence Williamson, and Morgan Drexen, Inc. ran this debt relief operation. CFPB				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 23, 2017

				 The CFPB took separate actions against CitiFinancial Servicing and CitiMortgage, Inc. for creating obstacles for struggling homeowners seeking options to save their homes. The mortgage servicers kept borrowers in the dark about options to avoid foreclosure or burdened them with excessive paperwork demands in applying for foreclosure relief. CitiMortgage has been ordered to pay an estimated $17 million in compensation and another $3 million in civil penalties. CitiFinancial Services is to refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million. CFPB				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2017

				 The CFPB sued TCF National Bank for tricking consumers into costly overdraft services. The CFBP alleges TCF designed its application process to obscure the fees and make overdraft seem mandatory for new customers to open an account, even though banks cannot charge overdraft fees on one-time debit purchases and ATM withdrawals without a consumer’s consent. TCF also adopted a loose definition of consent for existing customers in order to opt them into the service and pushed back on any customer who questioned the process. CFPB				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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