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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.

December 14, 2018

A debt-relief telemarketing operator has been permanently banned from both industries and ordered to pay over $23 million to the FTC and State of Florida for violating the Federal Trade Commission Act, Telemarketing Sales Rule, and Florida Deceptive and Unfair Trade Practices Act. Under the guise of multiple shell companies, Kevin Guice and his associates sold fraudulent debt relief services to more than 10,000 unsuspecting consumers, often by calling phone numbers on the FTC's National Do Not Call Registry. In one scheme, telemarketers falsely claimed to be able to substantially and permanently lower credit card interest rates in exchange for an upfront fee of between $500 to $5,000. In another scheme, telemarketers again falsely claimed to be able to access non-existent government funds to pay off credit card debt in exchange for another upfront fee of between $2,500 to $26,000. Proceeds from the $23 million judgment will be used to pay restitution to consumers harmed by these fraudulent schemes. FTC; FL AG

November 8, 2018

For its continued failure to prevent fraudulent money transfers, MoneyGram International Inc. (MoneyGram) agreed to pay $125 million to settle allegations it violated a 2009 order with the FTC and a 2012 deferred prosecution agreement with the DOJ. Both the 2009 order and 2012 agreement had required the global money transfer business to implement certain fraud prevention measures. Instead, even though some of its locations had reached fraud rates of as high as 50%, MoneyGram allegedly failed to take action, including failing to suspend or terminate locations or employees with high fraud rates, and failing to block individuals that it should have known were committing fraud. The new settlement expands the 2009 order and 2012 agreement to apply worldwide and requires additional fraud prevention measures. DOJ; FTC; USAO MDPA

October 29, 2018

The FTC has settled with an online student loan refinancer, SoFi Lending Corps, for allegedly misrepresenting the amount that student loan borrowers could save by refinancing with their company, sometimes by double the actual amount. In calculating the savings, SoFi allegedly excluded certain borrowers and failed to disclose or disclose clearly the fact that it had made those exclusions, a violation of the FTC Act. It will face civil penalties if it violates the finalized settlement order. FTC

October 24, 2018

A small-dollar lender that operates in Tennessee, Alabama, Kentucky, and Mississippi, has settled with the CFPB for allegedly violating the Consumer Financial Protection Act (CFPA). Cash Express, LLC allegedly sent letters to its customers to threaten them with lawsuits, misrepresented that it would report negative information to credit agencies, and withheld funds from cashed checks to satisfy prior loans. It has now been ordered to pay restitution of $32,000 as well as a $200,000 penalty. CFPB

October 18, 2018

The FTC has settled charges of deceptive health claims with a California doctor and his stem cell therapy clinic for a suspended $3.31 million. Dr. Bryn Jarald Henderson and his companies, Regenerative Medical Group and Telehealth Medical Group, had claimed they could treat a multitude of diseases, such as cerebral palsy, chronic kidney disease, heart disease, macular degeneration, multiple sclerosis, osteoarthritis, Parkinson's, strokes, traumatic brain injury, and even blindness through a procedure they called "amniotic stem cell therapy." Between 2014 and 2017, they offered therapy injections ranging from $5,000 to $15,000, earning at least $3.31 million in total. However, there is no evidence to show that the therapy works as claimed. Along with the suspended judgment (contingent on a fine of $525,000), Henderson and the clinic have also been asked to notify customers of the settlement. FTC

October 16, 2018

Cesare Alessandrini and his company, Forms Direct, Inc. (also known as American Immigration Center), have agreed to pay $2.2 million in restitution to customers defrauded by the company's deceptive websites, which used URLs and graphics that made them appear affiliated with U.S. Citizenship and Immigration Services (USCIS). After customers provided their personal information and paid between $120 to $300, many realized that they were not in fact on a government website, but rather the website of a form preparation service. As part of the settlement, Forms Direct has been ordered to clearly disclose its real identity to future customers, as well as inform them that they must submit their completed forms and fees separately to the government. FTC

October 16, 2018

A Texas-based background screening company, RealPage, has agreed to pay the FTC $3 million to settle charges that it violated the Fair Credit Reporting Act (FCRA). According to the FTC, from about 2012 to 2017, RealPage used overly broad criteria and did not do enough to filter out non-responsive hits that came up in criminal record searches, causing countless people to be wrongly associated with criminal records and possibly turned down for housing and other opportunities. FTC

September 27, 2018

Refund checks cut from the record amount of $505 Million will be mailed to consumers who were victims of an enormous payday lending scheme which was run by AMG Services, Inc., and CEO of AMG Services, Scott A. Tucker. Tucker’s attorney, Timothy Muir, was also involved. The refunds come out of the $1.3 billion civil court judgment and order against Tucker and his companies. They were found guilty of violating the FTC Act and the Truth in Lending Act for deceiving and taking advantage of millions of consumers from 1997 to 2013. They charged consumers exceedingly high interest rates and fees on short-term loans. Additionally, they worked out a scam to automatically withdraw interest payments from a consumer’s loan balance without touching the principal, leading to loan renewal on the next payday. In October, 2017, criminal convictions were obtained against Tucker by the U.S. Attorney’s Office for the Southern District of New York. He was sentenced in 2018 to 16 years and 8 months in prison. Tucker’s attorney was sentenced to seven years. The Federal Trade Commission and U.S. Department of Justice are working together to mail the 1,179, 803 refund checks across the country. DOJ; FTC  

September 17, 2018

A temporary restraining order has been issued by a federal court against two brothers, Steven and Kevin Shayan, and their four companies for allegedly using false marketing claims in online rental listings for low income housing, a violation of the FTC Act. Websites such as ApartmentHunterz.com and WeTakeSection8.com required housing hunters to pay weekly subscriptions of $14.99 or bimonthly subscriptions of $49 to access listings that were supposedly exclusive and up to date. On the contrary, many of the listings were no longer active or did not accept Section 8 housing vouchers. FTC

September 6, 2018

Two copycat military website operators—Sunkey Publishing, Inc. and Fanmail.com, LLC—have settled with the Federal Trade Commission (FTC) for violating the FTC Act and the FTC's Telemarketing Sales Rule (TSR). In addition to deceiving potential enlistees into providing personal information, the operators sold the information to schools as marketing leads, placed illegal telemarketing calls to people on the Do Not Call list, and gave potential enlistees the false impression that certain schools were endorsed by the military. As part of the settlement, they will turn over the websites and pay a suspended penalty of $12.1 million. FTC
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