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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.

June 23, 2017

The FTC has charged a North Carolina debt collection operation and its owner with taking money from consumers for fake debts they did not owe. The action is part of the FTC’s crackdown on “phantom” debt collection. According to the FTC, Anthony Swatsworth, ACDI Group LLC, and Solutions to Portfolios LLC bought phony payday loan debts – loans supposedly made by “500FastCash” – from SQ Capital through a debt broker, and continued to collect on those debts even after learning the debts were fake and receiving a full refund for their purchase. Almost immediately after ACDI started collecting on the loans, consumers complained and provided evidence that they had never taken out a 500FastCash loan. Other consumers complained that they did not have an outstanding balance. When the defendants reported the complaints to the broker, the broker returned the defendants’ money and told the defendants to stop collecting on the phony debts. Yet the defendants kept collecting from consumers for at least seven more months. FTC

June 14, 2017

Following a public comment period, the FTC has approved a final order settling charges that outpatient kidney dialysis chain DaVita, Inc.’s $358 million acquisition of competitor Renal Ventures Management LLC would have been anticompetitive. First announced in March 2017, the complaint alleged that the acquisition would lead to significant anticompetitive effects in five New Jersey markets (Brick, Clifton, Somerville, Succasunna, and Trenton), and in two Dallas-area markets (Denton and Frisco). The complaint alleged that without the competition in these markets, and with new entry unlikely to be timely or sufficient, the likely result would be reduced quality and higher prices for dialysis patients. DaVita agreed to divest the seven clinics to PDA-GMF Holdco, LLC, a joint venture between Physicians Dialysis and GMF Capital LLC. FTC

June 7, 2017

The CFPB took action against mortgage servicer Fay Servicing for failing to provide mortgage borrowers with legally required protections against foreclosure. Fay violated the CFPB’s servicing rules by keeping borrowers in the dark about critical information about the process of applying for foreclosure relief. The CFPB also found instances where the servicer illegally launched or moved forward with the foreclosure process while borrowers were actively seeking help to save their homes. Fay Servicing will pay up to $1.15 million to harmed borrowers and must stop its illegal practices. CFPB

June 6, 2017

As the result of Do Not Call (DNC) litigation brought by the U.S. Department of Justice on behalf of the FTC, as well as the states of California, Illinois, North Carolina, and Ohio, a federal court in Illinois has ordered penalties totaling $280 million and strong injunctive relief against Englewood, Colorado-based satellite television provider Dish Network. The U.S. District Court for the Central District of Illinois found Dish liable for millions of calls that violated the FTC’s Telemarketing Sales Rule (TSR) — including DNC, entity-specific, and abandoned-call violations — the Telephone Consumer Protection Act (TCPA), and state law. The civil penalty award includes $168 million for the federal government, which is a record in a DNC case. The remainder of the civil penalty was awarded to the states. FTC

June 1, 2017

A Federal court has granted a request from the FTC and the State of Georgia to permanently bar the deceptive business practices of an electronics buyback company that misled consumers about the amount of money it would pay them for selling their used smartphones, tablets and other devices. The court also ordered the company’s owner to pay more than $42 million. In granting the request for default judgement, the court agreed with the allegations in the FTC’s complaint that Laptop & Desktop Repair, LLC and its owner Vadim Olegovich Kruchinin earned millions by promising to buy back consumers’ used electronic devices for much more money than the defendants actually provided. After consumers provided basic information on the company’s website about the type and condition of the electronic device they wanted to sell, the defendants would provide consumers with a quote for the amount a seller would receive for the device. Yet once consumers sent in their devices to the defendants, the defendants dropped their offer price to as little as 3 percent to 10 percent of the original quote. FTC

May 31, 2017

Two brothers have agreed to settle FTC charges that in marketing and selling their trampolines, they deceived consumers by directing them to review websites that claimed to be independent but were not, and by failing to disclose that one of the brothers posted online product endorsements without disclosing his financial interest in the sale of the products. Under an administrative consent order announced today, Son “Sonny” Le and Bao “Bobby” Le are barred from engaging in such deceptive behavior in the future and must clearly and conspicuously disclose any material connections between a reviewer or endorser and the product being reviewed. According to the FTC’s complaint, working together and using several fictitious business names, the Les marketed and sold Infinity and Olympus Pro brand trampolines on several websites. These sales websites prominently featured logos from supposedly independent review entities, including “Trampoline Safety of America,” the “Bureau of Trampoline Review,” and “Top Trampoline Review.” FTC

May 26, 2017

Following a public comment period, the FTC has approved a final order and consent agreement in which the American Guild of Organists agreed to eliminate rules that restrict its members from competing for opportunities to perform. Announced in March 2017, the agreement between the FTC and the American Guild of Organists resolves the agency’s complaint that the guild’s rules restrained competition and harmed consumers in violation of the FTC Act. Under the guild’s code of ethics, if a consumer wished to have someone other than an “incumbent musician” play at a venue for a wedding, funeral or other service, the consumer was required to pay both the incumbent and the consumer’s chosen musician. The guild also developed and publicized compensation schedules and formulas, and instructed its chapters and members to develop and use regionally applicable versions to determine charges for their services. FTC

May 25, 2017

The FTC charged the operators of a phony student loan debt relief and credit repair scheme with bilking millions of dollars from consumers by falsely promising to reduce or eliminate their student loan debt and offering them non-existent credit repair services. At the FTC’s request, a federal court has temporarily halted the operation. The agency seeks to permanently stop the alleged illegal practices and obtain refunds for affected consumers. According to the FTC’s complaint, the operators of Strategic Student Solutions and related companies lured student loan borrowers with promises such as “Payments as low as $0 Monthly” or “Save 60 percent or MORE on your monthly payment.” According to the FTC’s complaint, SSS operators told the student loan borrowers they would be enrolled in a loan forgiveness or payment reduction program, and that their monthly payments would be applied to their loans. However, in many cases, consumers discovered that the defendants failed to enroll them in any loan forgiveness or payment reduction programs, and found out that none of their monthly payments were applied to their student loan debt. FTC

May 12, 2017

The FTC, along with federal, state and international law enforcement partners, today announced “Operation Tech Trap,” a nationwide and international crackdown on tech support scams that trick consumers into believing their computers are infected with viruses and malware, and then charge them hundreds of dollars for unnecessary repairs. As part of this coordinated effort, the FTC and its partners are announcing 16 new actions, including complaints, settlements, indictments, and guilty pleas, against deceptive tech support operations. This brings to 29 the number of law enforcement actions brought by Operation Tech Trap partners in the last year to stop tech support scams. FTC

May 4, 2017

A company that marketed itself as “the leader in home opiate detox since 2009” and its CEO have settled FTC charges that the withdrawal treatment claims for their “Withdrawal Ease” and “Recovery Ease” products were false or unsupported by scientific evidence. The court order settling the FTC’s charges bars Catlin Enterprises, Inc. and George Catlin, based in Austin, Texas, from making claims about opiate withdrawal, opiate dependency, or other health conditions, including through their product names, unless they possess competent and reliable science to back up those claims. “Opioid addiction is a scourge that has affected millions of Americans,” said Acting FTC Chairman Maureen K. Ohlhausen. “People who struggle with this problem need real help, not phony claims and false promises like the ones peddled by these defendants.” FTC
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