Cases of PPE Fraud Pursued by the Law Enforcement Agencies
When Coronavirus hit the country in the early part of the year last year, it created a situation of near panic as healthcare providers and paramedic staff were pressed on duty at a war footing. There was a desperate need for protective gear including masks, gloves, and the PPE kits worn by healthcare providers. For some time the country grappled with a shortage of PPE kits and President Trump had to invoke the Defense Production Act to fulfill the gap between demand and supply. Realizing the desperation among the agencies for the procurement of PPE kits, many people with criminal tendencies tried to secure contracts for individuals and entities in a fraudulent manner. Realizing this tendency, many federal agencies such as the Department of Justice and the FBI, and several state agencies swung into action and began pursuing the fishy dealings for the procurement of these PPE kits.
How and When Did Federal Agencies Became Alert?
It all started in April 2020 when the Department of Justice noted that companies were procuring PPE kits at a frantic pace to make huge profits later on by selling them. DOJ thought it relevant to investigate such instances of accumulation of PPE kits as it created a situation of scarcity in the healthcare industry. Realizing these attempts by unscrupulous individuals and organizations, President Trump invoked section 102 of the Defense Production Act that makes hoarding of protective equipment a cognizable offense.
There have been numerous instances of fraudulent orders for procurement of PPE kits in which individuals and entities have sought to make profits through illegal means. But these investigations by federal and state agencies have also increased the risk of persecution of genuine organizations involved with the procurement of these protective kits.
Different Kinds of PPE Frauds
People with unscrupulous minds devise new and creative ways of duping the agencies whenever they see a loophole in the laws. The same happened with the procurement and supply of PPE kits in government hospitals, clinics, and testing facilities. The main objective of federal agencies pursuing irregular financial transactions is to combat PPE fraud taking place around the country. The following is a list of some of the innovative ways in which criminals have sought to make illegal profits through the sale and purchase of these PPE kits.
● By making lucrative offers of inexpensive PPE kits and devices to organizations that are never intended to be delivered
● Selling PPE kits and medical devices at higher prices by offering kickbacks to officers authorized for giving orders
● Receiving orders by showing high-quality equipment but delivering inferior quality products
● Delivering orders of PPE kits and other devices that do not contain advertised safety features
● Capitalizing on the fears of the society by promising medical equipment and devices that will save people from the pandemic
● Making false promises of treatment and cure of Covid-19 through the sale of medical devices and PPE equipment
How to See Red Flags in Any Order of PPE Kits and Equipment?
These are extraordinary times requiring extraordinary steps to be taken by healthcare providers to not only combat Covid-19 but also to stay away from the allegations of federal agencies for being involved in PPE frauds. You must have a basic understanding of the warning signs that indicate the smell of PPE fraud in any procurement order. The following is a list of red flags in any order for the procurement of PPE kits and medical devices.
● When the supplier tries to increase the prices at the last minute
● When you see the supplier asking for payment in advance or full payment before the delivery of the PPE kits
● When the seller asks you to wire payment and give payment proof before dispatching the order.
● When the legitimacy or authenticity of the supplier cannot be verified through the internet or the manufacturer
● When the supplier does not return phone calls or answers the queries sent through email
● When the seller is unable to satisfy the buyer about the availability of such massive quantities of PPE kits when these items are in short supply in the market
Federal agencies say that all healthcare providers must exercise extreme caution in dealing with new suppliers and vendors.
FinCEN Warns Financial Institutions
FinCEN, the unit of the Department of Treasury responsible for collecting and analyzing financial crimes and cases of terror financing, has issued a warning to financial institutions about the increasing number of cases of PPE frauds. Financial Crimes Enforcement Network, has sought to alert banks and other lenders by sending them examples of how unscrupulous elements and organizations are duping healthcare providers in the supply of PPE kits and other medical devices. FinCEN has tried to raise an alarm by giving examples of suspicious financial transactions that should serve as warning signals for anyone involved in the procurement and ordering of PPE kits. Any healthcare provider can gain knowledge of different ways suppliers are duping healthcare providers by going through this list of PPE scams.
Scams involving Non-Delivery of PPE Kits After Receiving Payments
Federal agencies are seriously concerned with increasing instances of PPE kit fraud where suppliers have not delivered supplies of the ordered products even after receiving full payment from healthcare providers. Unscrupulous elements in the garb of genuine suppliers convince healthcare providers of the availability of supplies of PPE kits and medical devices meant for the protection against Covid-19. They dupe these buyers into making advance payments for the supplies citing a shortage of PPE kits and massive orders they are receiving from various buyers. A situation of utter chaos because of a shortage of PPE kits has made it easier for these people with malicious intentions. They can take advantage of unsuspecting healthcare providers by using fraudulent schemes.
Researchers and doctors are working overtime to introduce a vaccine against Covid-19 for the protection of millions of lives across the nation. At the same time, unscrupulous elements are trying to take advantage of a situation of chaos because of a shortage of PPE kits. Various law enforcement agencies are pursuing cases of PPE frauds and alerting healthcare providers to stay away from the trap set by people with malicious intentions.
