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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.

				

			

			
						
					
			

	
		
		

			

				
				
December 16, 2016

				 The CFPB took action against Moneytree, Inc., a financial services company that offers payday loans and check-cashing services, for misleading consumers with deceptive online advertisements and collections letters, and making unauthorized electronic transfers from consumers’ bank accounts. The CFPB has ordered the company to cease its illegal conduct, provide $255,000 in refunds to consumers, and pay a civil penalty of $250,000.  CFPB				 					 

						
Tagged in:
													  Government Investigation, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 16, 2016

				 CarMax Inc. and two other major used auto retailers have agreed to settle FTC 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 proposed consent orders will prohibit them from making unqualified inspection or safety-related claims about their used vehicles if any are subject to open, or unrepaired, safety recalls. Also, following a public comment period, the Commission has approved final consent orders in similar cases against General Motors Company, Jim Koons Management, and Lithia Motors Inc. that were settled earlier this year. Despite highlighting their inspections, the FTC alleges that CarMax failed to adequately disclose that some of the cars had open recalls. These recalls included defects that could cause serious injury, including the GM key ignition switch defect, as well as the Takata airbag defect.  FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 15, 2016

				 DeVry University and its parent company have agreed to a $100 million settlement of a FTC lawsuit alleging that they misled prospective students with ads that touted high employment success rates and income levels upon graduation. The FTC settlement secures significant financial redress for tens of thousands of students harmed by DeVry’s conduct. Under the settlement resolving the FTC charges, DeVry will pay $49.4 million in cash to be distributed to qualifying students who were harmed by the deceptive ads, as well as $50.6 million in debt relief. The debt being forgiven includes 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, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 14, 2016

				 The operators of the Toronto-based AshleyMadison.com dating site have agreed to settle FTC and state charges that they deceived consumers and failed to protect 36 million users’ account and profile information in relation to a massive July 2015 data breach of their network. The settlement requires the defendants to implement a comprehensive data-security program, including third-party assessments. In addition, the operators will pay a total of $1.6 million to settle FTC and state actions. FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
													  Cybersecurity and Data Breaches, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 12, 2016

				 The FTC has granted summary decision against California Naturel, Inc., for falsely advertising its sunscreen product as “all natural” in violation of Sections 5 and 12 of the FTC Act.  In its opinion, written by Chairwoman Edith Ramirez, the Commission states that the company promotes its “all natural” sunscreen on its website as containing “only the purest, most luxurious and effective ingredients found in nature.”  But California Naturel admitted that eight percent of its sunscreen formula is in fact dimethicone, a synthetic ingredient.  The Commission’s final order prohibits California Naturel from misrepresenting the ingredients or composition of its products; whether a product is “all natural” or “100% natural;” the extent to which a product contains any natural or synthetic ingredient or component; or the environmental or health benefits of such a product. It also requires the company to have competent and reliable evidence to support any of the four foregoing claims it makes about any of its products.  FTC				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 12, 2016

				 The marketers of a mobile app designed to measure blood pressure have agreed to settle FTC charges that they deceived consumers with claims that their Instant Blood Pressure app was as accurate as a traditional blood pressure cuff. In addition, the Commission alleged that the owner provided a positive review of the app, rating it “five stars” in the app stores, without disclosing his connection to the company. Under the terms of the FTC settlement, Aura Labs, Inc., doing business as AuraLife and AuraWare, and its founder and co-owner, Ryan Archdeacon, are barred from making such unsupported claims in the future and must disclose any material connections between Aura and people who endorse its products.  FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 8, 2016

				 The FTC is providing over $88 million in refunds to more than 2.7 million AT&T customers who had third-party charges added to their mobile bills without their consent, a tactic known as “mobile cramming.” The refunds to consumers relate to 2014 settlements with AT&T, and the companies behind two of the cramming schemes, Tatto and Acquinity.  According to the FTC’s complaint, AT&T placed unauthorized third-party charges on its customers’ phone bills, usually in amounts of $9.99 per month, for ringtones and text message subscriptions containing love tips, horoscopes, and “fun facts.” The FTC alleged that AT&T kept at least 35 percent of the charges it imposed on its customers.  FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 7, 2016

				 The CFPB issued orders against three reverse mortgage companies for deceptive advertisements, including claiming that consumers could not lose their homes. American Advisors Group, Reverse Mortgage Solutions, and Aegean Financial have been ordered to cease deceptive advertising practices, implement systems to ensure they are complying with all laws, and pay penalties.  CFPB
				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 30, 2016

				 The FTC has closed the book on a data broker operation that the agency alleges got personal information from people who thought they were applying for payday loans online, and sold it to a scam that tapped consumers’ bank accounts and credit cards without their consent.  A stipulated order against Jason A. Kotzker resolves charges the FTC brought in August 2015, alleging that he and his co-defendants, instead of passing the information to legitimate payday lenders, sold it to companies like Ideal Financial Solutions Inc., which raided consumers’ accounts for at least $7.1 million. The order prohibits Kotzker from selling or disclosing consumers’ sensitive personal information, making misrepresentations about any financial or other product or service, and profiting from consumers’ personal information and failing to dispose of it properly. FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 21, 2016

				 The CFPB filed a federal lawsuit against Access Funding, LLC for its illegal scheme in which victims of lead-paint poisoning and others were deceived into signing away future settlement payments in exchange for a significantly lower lump-sum payout. Access Funding allegedly steered victims to receive “independent advice” from a sham advisor – an attorney paid directly by the company – who indicated to consumers that the transactions required little scrutiny. The CFPB seeks to put an end to the company’s unlawful practices, obtain relief for the harmed consumers, and impose penalties.  CFPB				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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