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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.

				

			

			
						
					
			

	
		
		

			

				
				
July 27, 2022

				 Trident Mortgage Company entered into a settlement agreement with federal and state agencies to resolve allegations that the non-bank lender intentionally discriminated against minority loan applicants by engaging in a pattern or practice of lending discrimination through “redlining.”  Trident agreed to invest over $20 million to increase credit opportunities in neighborhoods of color in the Philadelphia metropolitan area, and pay a $4 million penalty to the CFPB. DOJ; CFPB; PA; NJ; DE				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 26, 2022

				 Hyundai Capital America will pay $19 million for their failures to provide accurate information to nationwide credit reporting companies, tarnishing the records of more than 2.2 million consumer accounts through no fault of their own. Between January 2016 and March 2020, because of their outdated systems and processes, Hyundai violated the Fair Credit Reporting Act and failed to: report complete and accurate loan and lease account information; provide date of first delinquency information when required; modify or delete information when required; have reasonable identity theft procedures; and have reasonable accuracy and integrity policies and procedures. CFPB				 					 

						
Tagged in:
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 14, 2022

				 Bank of America will pay fines totaling $225 million to following federal investigation into its administration of state unemployment insurance and other public benefit programs, which it provided pursuant to contracts with 12 states to deliver benefits through prepaid debit cards. When demand for benefits surged with the COVID-19 pandemic, the Bank adopted automated fraud detection practices which it the government alleged it knew or should have known would lead to its incorrectly freezing or blocking accounts. The CFPB and OCC found that the Bank imposed unreasonable barriers that made it difficult for people to report fraudulent use of their cards or unfreeze their prepaid debit cards, and failed to establish adequate operational processes, risk management, and internal controls. In addition to the penalties – $100 million imposed by the CFPB and $125 million imposed by the OCC – the Bank was ordered to provide redress to consumers and take corrective action with respect to its oversight over the programs.  CFPB; OCC				 					 

						
Tagged in:
													  COVID-19, 
													  Financial Institution Fraud, 
													  Government Programs Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
May 17, 2022

				 R360 LLC and its owner, Steven Doumar, were hit with a $3.8 million civil penalty judgment under the Opioid Addiction Recovery Fraud Prevention Act of 2018, for deceiving people seeking addiction treatment. The case, a first for the FTC under the Act, alleges that R360 made misrepresentations in its television ads for its “R360 Network,” comprised of supposed addiction treatment and recovery specialists. R360 and Doumar touted a rigorous evaluation process for its service providers, to meet the customers’ individualized needs, when, according to the government’s complaint, Doumar was the one responsible for assessing and selecting the treatment centers, even though he had no expertise or education in the field. The FTC also secured an order prohibiting Doumar from making similar misrepresentations going forward. FTC				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Misrepresentations, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
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, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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