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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.

				

			

			
						
					
			

	
		
		

			

				
				
May 4, 2022

				 Bank of America has been ordered to pay a $10 million civil penalty for processing illegal, out-of-state garnishment orders totaling nearly $600,000 against 3,700 customers’ bank accounts beginning in 2011.  According to the CFPB, the bank deceived customers about their rights, imposed unenforceable clauses, and failed to adhere to consumer protections governing customer bank accounts.  As part of the resolution, the nation’s second largest bank must also fix its broken garnishment process and eliminate unenforceable clauses from its contracts.  CFPB				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 15, 2022

				 Caribbean Saint James School of Medicine a/k/a Human Resource Development Services, Inc., and its operator Kaushik Guha will pay $1.2 million in refunds to students who were lured by exaggerated promises of future success. For a period spanning at least 4 years, the defendants misrepresented their students’ medical license exam pass rate and misrepresented their residency match rate, stating that theirs was equal American schools’ match rate. Defendants violated the FTC’s Holder Rule, which requires specific notice to credit-holding consumers informing them of their right to assert claims, and also failed to provide a CPR disclosure in their credit agreements. FTC				 					 

						
Tagged in:
													  Education Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 17, 2022

				 USAA Federal Savings Bank will pay $140 million in penalties and admit that it willfully failed to implement and maintain an anti‑money laundering (AML) program that met the requirements of the Bank Secrecy Act, and willfully failed to submit timely and accurate suspicious activity reports.  FinCEN imposed a $140 million penalty, and the bank will receive credit for its payment of a $60 million penalty imposed by the Office of the Comptroller of the Currency (OCC) for related violations. FinCEN; OCC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Money Laundering, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 9, 2022

				 Chevron Phillips Chemical Company LP has agreed to pay a $3.4 million penalty and undertake compliance measures valued at $118 million to resolve a federal complaint regarding alleged violations of the Clean Air Act and related laws arising from its flaring at petrochemical facilities in Cedar Bayou, Port Arthur, and Sweeney, Texas.  The government claimed that Chevron Phillips failed to properly operate and monitor its industrial flares, which resulted in excess emissions of harmful air pollution at the three facilities.  EPA				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 8, 2022

				 The operators of online stock trading site RagingBull.com, which used bogus earnings claims to lure customers into expensive and hard to cancel subscriptions, have been ordered to pay $2.4 million.  The proposed settlement order also prohibits the defendants from making similar claims in the future, requires them to obtain informed consent from consumers before signing them up to subscriptions, and requires them to provide consumers with easy methods of cancellation.  FTC				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 24, 2022

				 The National Bank of Pakistan and its New York branch will pay a total of $55.4 million to resolve investigations by the New York State Department of Financial Services and the Federal Reserve Bank of New York into Bank Secrecy Act/Anti-Money Laundering compliance deficiencies.  The bank had previously entered into agreements with the government entities, acknowledging BSA/AML weaknesses and agreeing to undertake remedial measures.  However, the bank had failed to undertake adequate remedial  measures, as found in examinations by the government entities.  NY DFS; Fed				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Money Laundering, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 7, 2021

				 Vyera Pharmaceuticals, LLC and its parent company Phoenixus AG will pay up to $40 million and have agreed to make its drug Daraprim available to any potential generic competitor at list price to resolve claims of anticompetitive conduct.  The federal government and state governments alleged that Vyera principals Martin Shkreli and Kevin Mulleady enacted a plan to acquire life-saving toxoplasmosis drug, Daraprim, and dramatically raise its list price by 400% while engaging in conduct to prevent generic competition and protect their monopolistic pricing.  The resolution also bars Mulleady from working in the pharmaceutical industry for seven years; claims against Shkreli are continuing.  FTC; CA; NY; NC; VA				 					 

						
Tagged in:
													  Drug and DME Pricing, 
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 9, 2021

				 The National Highway Traffic Safety Administration announced a $24.3 million whistleblower award to Gwang Ho Kim, a former Hyundai safety engineer who provided critical information to NHTSA about safety defects in millions of Hyundai and Kia vehicles.  The award under the Motor Vehicle Safety Whistleblower Act was made in connection with Hyundai and Kia’s 2020 agreement to pay combined penalties of up to $210 million. NHTSA.				 					 

						
Tagged in:
													  Auto Safety, 
													  International Whistleblowers, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 19, 2021

				 JPay, a financial services company which, among other services, provides debit cards to prisoners to meet their essential needs as they are released from incarceration, will pay $6 million – $4 million in restitution and $2 million as a civil penalty – to resolve allegations that they violated the Consumer Financial Protection Act and Electronic Fund Transfer Act by charging consumers unlawful fees.  As part of the settlement, JPay is also limited in fees it can impose on release cards going forward.  CFPB				 					 

						
Tagged in:
													  Correctional Services Fraud, 
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 12, 2021

				 United Behavioral Health and United Healthcare Insurance Co. will pay $2 million in penalties to resolve claims that the insurer unlawfully denied coverage for mental health and substance use disorder treatment in violation of laws that require health insurance plans to cover mental health and substance use disorder treatment the same way they cover physical health treatment. New York and the federal Department of Labor alleged that United reduced allowed amounts for mental health and substance abuse services provided by non-physicians, but not for medical treatments provided by non-physicians, and conducting utilization reviews for psychotherapy that were not conducted at the same rate for medical/surgical services.  In addition the penalty, United agreed to pay $13.6 million to affected participants and beneficiaries.  DOL; NY				 					 

						
Tagged in:
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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