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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.

				

			

			
						
					
			

	
		
		

			

				
				
November 21, 2016

				 Following a public comment period, the FTC has approved a final consent order with Warner Bros. Home Entertainment Inc., settling charges that the company failed to adequately disclose that it paid online influencers to post gameplay videos.  According to the FTC’s complaint, Warner Bros. deceived consumers during a marketing campaign for the video game Middle Earth: Shadow of Mordor, by failing to adequately disclose that it paid online “influencers” thousands of dollars to post positive gameplay videos on YouTube and social media. Over the course of the campaign, the sponsored videos were viewed more than 5.5 million times. The FTC also alleged Warner Bros. gave influencers a free advance-release version of the game and told them how to promote it. Warner Bros. also allegedly required the influencers to promote the game in a positive way and not to disclose any bugs or glitches they found. Under the final order, Warner Bros. is barred from failing to make such disclosures in the future and cannot misrepresent that sponsored content, including gameplay videos, are the objective, independent opinions of video game enthusiasts or influencers.  FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 15, 2016

				 The Federal Trade Commission today announced a new “Enforcement Policy Statement on Marketing Claims for Over-the-Counter (OTC) Homeopathic Drugs.” The policy statement was informed by an FTC workshop held last year to examine how such drugs are marketed to consumers. The FTC also released its staff report on the workshop, which summarizes the panel presentations and related public comments in addition to describing consumer research commissioned by the FTC. The policy statement explains that the FTC will hold efficacy and safety claims for OTC homeopathic drugs to the same standard as other products making similar claims. That is, companies must have competent and reliable scientific evidence for health-related claims, including claims that a product can treat specific conditions. FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 14, 2016

				  At the request of the FTC, a U.S. district court judge issued a summary decision and $30 million judgment against the pitchman behind a product called Pure Green Coffee, who deceived consumers using false weight-loss claims, bogus testimonials, and fake news websites.  The U.S. District Court for the Middle District of Florida, Tampa Division, ruled that Nicholas Scott Congleton deceptively marketed Pure Green Coffee for weight loss through NPB Advertising, Inc. and a web of other companies under his control. The court order permanently bars him from the deceptive advertising practices challenged by the Commission.  FTC				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 10, 2016

				 The FTC has charged that in numerous instances, prepaid card company NetSpend Corporation deceived consumers, many of whom do not have bank accounts, about access to funds deposited on defendants’ debit cards.  According to the FTC’s complaint, NetSpend tells consumers that its reloadable prepaid debit cards offer an alternative way to store and immediately access their funds. But once people have loaded funds onto the cards, many of them find they cannot access their money, either because NetSpend denies or delays activation of the card, or because it blocks consumers from using it. The FTC seeks to return consumers’ funds and ensure that NetSpend provides them with promised access to their funds in the future.  FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 8, 2016

				 The FTC is mailing checks totaling more than $3.7 million to people who lost money to Fortune Hi-Tech Marketing, a pyramid scheme whose operators were banned from multi-level marketing under a settlement with the FTC and the states of Illinois, Kentucky and North Carolina.  In January 2013, the FTC and the states charged the Fortune Hi-Tech Marketing defendants with deceiving consumers by claiming they would earn significant income through selling various products and services if they signed up as FHTM representatives.  Participants were required to pay substantial start-up costs and monthly fees to retain their positions with the company.  FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 4, 2016

				 The FTC has charged a Pittsburgh-based manufacturer, Innovative Designs, Inc., with making false and unsubstantiated claims that its Insultex House Wrap would save consumers money by providing significant insulation without using much space.  According to the FTC, Innovative Designs claims its thinner, less-expensive, house wrap has an insulation value of R-3 and its thicker, more expensive product has an R-6 value, and that its advertised R-values are based on valid scientific testing. In fact, the FTC’s complaint alleges that the R-value of both products is substantially less than one, and the test results and a certificate touted by the company are flawed and invalid.  The FTC charges Innovative Designs with failing to substantiate its claims that the purported insulation value of Insultex House Wrap saves consumers money. FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 3, 2016

				 The CFPB filed a federal lawsuit against B&B Pawnbrokers, Inc. for deceiving consumers about the actual annual cost of its loans. B&B Pawnbrokers allegedly broke the law by misstating the charges associated with pawn loans. The CFPB’s lawsuit seeks to end B&B Pawnbrokers' illegal practices, get restitution for the consumers it harmed, and impose penalties.  CFPB				 					 

						
Tagged in:
													  Government Investigation, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 2, 2016

				 The CFPB and New York Attorney General filed a lawsuit in a federal district court against the leaders of a massive debt collection scheme based out of Buffalo, New York. Douglas MacKinnon and Mark Gray allegedly operate a network of companies that harass, threaten, and deceive millions of consumers across the nation into paying inflated debts or amounts they may not owe. The CFPB is seeking to shut down this illegal operation and to obtain compensation for victims and a civil penalty against the companies and partners.  CFPB				 					 

						
Tagged in:
													  Government Investigation, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 31, 2016

				 the FTC has approved a modified final order settling charges that the $28 billion merger of Koninklijke Ahold and Delhaize Group, which together own five well-known U.S. grocery store chains, would likely be anticompetitive.  Under the proposed order, first announced in July 2016, the companies are required to sell 81 stores to seven divestiture buyers.  The proposed order calls for prior Commission approval before one of the divestiture buyers, Supervalu, transfers or sells an ownership interest in an acquired store to another party. This modified final order approves Supervalu’s proposed joint venture transaction with Donstekim Enterprises, LLC, regarding its acquired stores.  FTC				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 28, 2016

				 The FTC has charged Blue Saguaro Marketing LLC, MarketingWays.com LLC, Amazon.com Associates Program; Max Results Marketing LLC, Grant Strategy Solutions, and Oro Canyon Marketing II LLC, among others, with bilking money from seniors, veterans, and debt-laden consumers by selling them a worthless money-making opportunity purportedly linked to Amazon.com, and luring them with a phony grants program.  According to the FTC’s complaint, the defendants’ telemarketers falsely tell people they represent Amazon and offer, for hundreds or thousands of dollars, to create a website for them linked to Amazon.com, claiming they will earn thousands of dollars every month in commissions for sales via the website. They also falsely offer to advertise the consumer’s website and use search engine optimization to drive customers to it. FTC

				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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