Louis-Armstrong

With covid-19 vaccines coming, federal investigators grow wary of fraud

Production will ramp up after that, but it will probably take several months for companies to make enough doses for the nation’s entire population of 330 million. Fraudsters looking to exploit that unmet demand are a concern for Homeland Security Investigations (HSI), a division of U.S. Immigration and Customs Enforcement (ICE) that announced a new operation this week to stop them.

“We’re especially concerned about financial fraud schemes, as people who are thinking they’re going onto legitimate websites are asked to provide financial or personal data,” said Steve Francis, the assistant director for global trade investigations at ICE and the head of the agency’s Intellectual Property Rights Coordination Center. “We’re trying to stay ahead of these criminal organizations, who are very creative in finding ways to try to exploit people.”

During the first phase of the ICE operation this spring, the agency targeted criminals who were trying to ship counterfeit personal protective equipment, such as fake N95 masks, as well as phony tablets of drugs like hydroxychloroquine, an unproven treatment that President Trump has repeatedly promoted.

ICE has analyzed more than 700 pandemic-related criminal investigations since April, seizing $27 million in illicit profits and shutting down 70,000 website domains, Francis said.

The agency is more worried about data theft and financial fraud than criminal groups shipping fake vials of the vaccine, Francis said: “We’re concerned that people will go online searching for ways to become vaccinated, and they will be asked to register to receive treatments by providing personal identifying information.”

Approximately 85 to 90 percent of the work of the Intellectual Property Rights Coordination Center in recent years has focused on counterfeit goods produced in China and Hong Kong, but the pandemic brought a rapid diversification. Investigative teams have disrupted fraud schemes and seized goods from at least 40 countries this year, Francis said.

“This is a global pandemic, and with PPE in high demand, criminal organizations all over the world pivoted to that,” he said.

While ICE is best known for its Enforcement and Removal Operations division — responsible for arresting and detaining immigration violators — its investigative branch is one of the federal government’s main tools for rooting out fraud and interdicting counterfeit goods.

“We will continue to use our broad legal authorities and long-standing relationships with domestic and international law enforcement agencies and private sector partners to address this emerging public health threat, and will sustain our efforts to disrupt and dismantle criminal networks seeking to profit from the covid-19 pandemic,” Derek Benner, HSI’s top official, said in a statement. “ICE HSI has been at the forefront of the government’s investigative response to covid-19-related crime since the onset of the pandemic and will remain a leader in the fight to prevent vaccine fraud and to protect the health and safety of Americans.”

Homeland Security officials are working with drugmakers to ensure that vaccines and other products are clearly labeled, Francis said. The companies will set up hotlines to gather tips about potential fraud.

Francis said the first shipments of vaccines distributed in the United States will be produced domestically, but as production also increases globally, customs officials and other inspectors will continue to work with companies to keep fake products out of the market.

Both the Pfizer and Moderna vaccines will require two doses, spaced several weeks apart.

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