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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 19, 2016

				 The FTC has charged online distance education school Stratford Career Institute with misleading consumers about its high school equivalency program that the agency alleges failed to meet the basic requirements set by most states.  In its complaint, the FTC alleges that Stratford’s extensive advertising for its high school program included multiple references to a “high school diploma” leading to an increase in earning potential, access to better jobs and promotions, and the ability to apply for higher education. The FTC’s complaint alleges that Stratford’s high school program fell short of its promises, meaning thousands of students nationwide paid as much as $989 for a diploma that could not meet their educational or career needs. FTC				 					 

						
Tagged in:
													  Education Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 11, 2016

				 The FTC has charged two separate office supply operations with targeting non-profit organizations and small businesses, such as child care centers, educational institutions, churches, and hospitals, and tricking them into paying for overpriced office and cleaning supplies they never ordered.  In the California case, Telestar Consulting Inc., also doing business as Kleritec and United Business Supply, and Karl Wesley Angel, allegedly used a variety of tactics to persuade consumers to pay for unordered merchandise.  The defendants in the Maryland case are American Industrial Enterprises LLC, Easton Chemical Supply Inc., Lighting X-Change Company LLC, LMS Lighting & Maintenance Solutions LLC, Werner International Enterprises Inc., Benjamin Cox, Vincent Stapleton and John Tharrington.  The complaint also names a relief defendant, TBC Companies Inc., that profited from the scheme.  FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
February 5, 2016

				 Two Maine-based marketers of weight-loss supplements and their owners will surrender substantial personal and business assets and will be prohibited from making deceptive claims about health products and engaging in deceptive marketing practices under a settlement reached with the FTC and the State of Maine’s Office of the Attorney General.  The agencies’ joint complaint charges Anthony Dill, his wife Staci Dill, and their two companies, Direct Alternatives and Original Organics LLC, with violating the FTC Act and Maine consumer protection laws in connection with their promotion and sale of weight loss supplements AF Plus and Final Trim. In total, the defendants sold more than $16 million worth of the two products over the past four years. The companies have ceased all sales. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
February 2, 2016

				 Toyota Motor Credit will pay up to $21.9 million in restitution to thousands of African-American and Asian and Pacific Islander borrowers who paid higher interest rates than white borrowers for their auto loans, without regard to their creditworthiness, as a result of the company’s past practices. Toyota Motor Credit will also change its pricing and compensation system to substantially reduce dealer discretion and accompanying financial incentives to mark up interest rates. The action is a result of a joint CFPB and DOJ investigation that concluded that Toyota Motor Credit’s discretionary pricing and compensation policies resulted in discriminatory outcomes. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
February 2, 2016

				 The FTC filed suit against Chemence, Inc., an Ohio corporation, alleging that the company is deceiving consumers by making Made in USA claims for their strong, fast-acting glues such as Kwik Frame, Kwik Fix, and Krylex, which are produced using a significant amount of imported chemicals. “For many shoppers, a claim that a product is made in the USA is a big selling point,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Companies should not overstate the amount of U.S. content their products actually contain.” FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
January 28, 2016

				 General Motors Company, Jim Koons Management and Lithia Motors Inc. have agreed to settle separate FTC administrative complaint allegations that each touted how rigorously they inspect their cars, yet failed to disclose that some of the used cars they were selling were subject to unrepaired safety recalls. Jim Koons Management, which has 15 dealerships in the Mid-Atlantic region, and Oregon-based Lithia Motors Inc., which has more than 100 stores in the West and Midwest, are two of the nation’s largest used car dealers. FTC				 					 

						
Tagged in:
													  Auto Safety, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 27, 2016

				 The FTC has filed suit against the operators of DeVry University, alleging that DeVry’s advertisements deceived consumers about the likelihood that students would find jobs in their fields of study, and would earn more than those graduating with bachelor’s degrees from other colleges or universities.  “Millions of Americans look to higher education for training that will lead to meaningful employment and good pay,” said FTC Chairwoman Edith Ramirez. “Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn.”   FTC				 					 

						
Tagged in:
													  Education Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 21, 2016

				 The CFPB required Herbies Auto Sales to pay $800,000 for violating the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act by unlawfully advertising a misleadingly low APR without disclosing hidden charges and requirements. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
January 9, 2016

				 The FTC and New York State Attorney General have charged the marketers of the dietary supplement Prevagen with making false and unsubstantiated claims that the product improves memory, provides cognitive benefits, and is “clinically shown” to work. The extensive national advertising campaign for Prevagen, including TV spots on national broadcast and cable networks such as CNN, Fox News, and NBC, featured charts depicting rapid and dramatic improvement in memory for users of the product.  The FTC alleges that the defendants enticed consumers to spend anywhere from $24 to $68 for bottles of 30 supplement pills by touting the product’s active ingredient – a protein derived from jellyfish – to improve memory and reduce memory problems associated with aging.  In fact, the complaint alleges, the marketers relied on a study that failed to show that Prevagen works better than a placebo on any measure of cognitive function. FTC				 			
	
		
		
	


 			




	
		
		

			

				
				
January 8, 2016

				 After a public comment period, the FTC approved a final order resolving the Commission’s complaint against Craig Brittain, alleging he used deception to acquire and post intimate images of women, then referred them to another website he controlled, where they were told they could have the pictures removed if they paid hundreds of dollars.  Under the terms of the settlement, Brittain is required to permanently delete all of the images and other personal information he received during the time he operated the site.  He will also be prohibited from publicly sharing intimate videos or photographs of people without their affirmative express consent, as well as being prohibited from misrepresenting how he will use any personal information he collects online.  FTC				 			
	
		
		
	


 			


											

						

								

									
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