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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.
  • 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.
  • 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.
  • 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.

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.

October 5, 2015

The head of a sham debt relief operation agreed to a judgment of more than $7.9 million to settle FTC charges that he deceived consumers and charged them thousands of dollars while providing nothing in return. In a complaint filed in May 2014, the FTC alleged that the DebtPro 123 LLC defendants falsely told consumers their programs would settle all of their debts and repair their credit. Then they told them to stop paying and communicating with creditors, which led to more debt and worse credit because of accrued interest, late charges, creditor lawsuits, garnished wages, and sometimes bankruptcy. FTC

October 1, 2015

The FTC is mailing 23,406 checks totaling more than $3.7 million to consumers who lost money after buying LeanSpa, a supplement whose marketers allegedly made deceptive weight-loss claims. The FTC and the State of Connecticut sued the marketers of LeanSpa in December 2011, charging that they used fake websites to promote acai berry and “colon cleanse” weight-loss products, and falsely told consumers they could receive free trials by paying a nominal shipping and handling cost. In reality, consumers ended up paying $79.95 for the trial, and for recurring monthly shipments of the product that were hard to cancel. FTC

September 29, 2015

The FTC is mailing 6,832 checks totaling more than $1.1 million to consumers who lost money to a health insurance scam. In 2012, the FTC charged the Independent Association of Businesses and Health Service Providers defendants with violating the FTC Act and the FTC’s Telemarketing Sales Rule by deceiving consumers seeking comprehensive health insurance. Instead of health coverage, consumers received membership in IAB, an obscure trade association that provided purported discounts on services such as identity-theft protection, travel, and roadside assistance, and some healthcare related benefits that were subject to broad exclusions and limitations. FTC

September 16, 2015

The operators of a fraudulent debt collection scheme will be banned from the debt collection business under a settlement with the FTC, resolving charges that they illegally processed more than $5.2 million in payments from consumers for payday loan debts they did not owe. The settlement resolves a complaint the FTC filed against Kirit Patel, Broadway Global Master Inc., and In-Arabia Solutions Inc. In 2012, alleging that callers working with the defendants harassed consumers into paying on bogus debts, often pretending to be agents of law enforcement or fake government agencies such as the “Federal Crime Unit of the Department of Justice.” FTC

September 16, 2015

The loan-servicing arm of Texas-based auto dealer Tricolor Auto Group will pay $82,777 in civil penalties as part of a settlement to address FTC charges that it failed to have written policies and procedures regarding the accuracy of reported credit information, and failed to properly investigate disputed consumer credit information. The FTC’s complaint alleges that the company’s loan-servicing group, Tricolor Auto Acceptance, LLC violated the Furnisher Rule, which was implemented under the Fair Credit Reporting Act. FTC

September 3, 2015

the FTC has approved a final order resolving the Commission’s complaint against Nomi Technologies for misleading consumers about the available choices to opt-out of the company’s mobile device tracking program. The settlement was first announced in April 2015. In its complaint, the FTC alleged that Nomi misled consumers with promises that it would provide an in-store mechanism for consumers to opt out of tracking and that consumers would be informed when locations were using Nomi’s tracking services. FTC

August 24, 2015

The FTC is mailing refund checks to consumers who lost money buying dietary supplements, Speak and Speak Smooth, deceptively marketed as proven effective at treating childhood speech disorders, including those associated with autism. The refunds are from money collected through a settlement, under which the NourishLife, LLC defendants agreed to stop making allegedly deceptive claims that their products develop and maintain normal, healthy speech and language capabilities in children. FTC

August 18, 2015

Pharmaceutical companies Concordia Pharmaceuticals Inc. and Par Pharmaceutical, Inc. have settled FTC charges that they entered into an unlawful agreement not to compete in the sale of generic versions of Kapvay, a prescription drug used to treat Attention Deficit Hyperactivity Disorder. As part of the settlement, the companies agreed not to enforce the anticompetitive provisions of their agreement, in which Concordia agreed not to sell an authorized generic version of Kapvay in exchange for a share of Par’s revenues. FTC

August 7, 2015

The FTC charged a data broker operation, including Sequoia One LLC and Gen X Marketing Group LLC, with illegally selling payday loan applicants’ financial information to a scam operation that took millions of dollars from consumers by debiting their bank accounts and charging their credit cards without their consent. According to the FTC’s complaint, the data broker enterprise bought loan applications from the operators of payday loan websites, and got others directly from consumers via their own payday loan websites. Instead of passing on those applications to legitimate payday lenders, the defendants sold the information to companies that raided the consumers’ accounts for at least $7.1 million. FTC

August 4, 2015

The operators of a bogus credit repair scheme that allegedly tricked Spanish-speaking consumers into paying thousands of dollars each to supposedly improve their credit will be banned from offering credit repair services and subject to a monetary judgment under settlements with the FTC. According to a federal court complaint filed by the Commission in March 2015, the defendants did business using the name FTC Credit Solutions, misleading consumers not only about the nature of the alleged credit repair services they offered, but also claiming an affiliation with the Commission that did not exist. FTC
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