As the race to vaccinate continues, state and federal enforcement agencies are hard at work investigating and prosecuting COVID-19-related health care fraud. As Acting Assistant Attorney General Nicholas L. McQuaid of the U.S. Department of Justice’s (DOJ) Criminal Division stated in March: “To anyone thinking of using the global pandemic as an opportunity to scam and steal from hardworking Americans, my advice is simple—don’t.”1 Recent enforcement efforts in the health care realm have targeted fraudsters who have misappropriated funds from the Provider Relief Fund and others who are peddling counterfeit medical supplies. And while these enforcement efforts will likely continue, a new scheme may be forming as well—the making, buying and using of counterfeit COVID-19 vaccination cards.
Misappropriation of Funds From the Provider Relief Fund
A likely target of increased governmental focus are those who received funds from the Provider Relief Fund. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, Public Law 116-136, signed into law on March 27, 2020, established a “Provider Relief Fund” as part of a larger Public Health and Social Services Emergency Fund. The funds are to be distributed by grants or other payment mechanisms to eligible health care providers to reimburse them for health care-related expenses or lost revenues attributable to COVID-19.2 All health care providers retaining payments from the Provider Relief Fund must certify that the funds will be used for only these purposes and must attest to the terms and conditions associated with the payments and “any other relevant statutes and regulations, as applicable.”3 The terms and conditions also obligate providers who accept Provider Relief Funds to consent to reporting requirements about uses of the funds, as well as public disclosure of their receipt of the funds.4
In February, DOJ indicted the first person in the nation with misappropriating funds from the Provider Relief Fund, charging a Michigan woman with embezzlement of government property.5 The indictment alleges that the woman had previously owned a home health care facility that closed in early 2020 after Medicare demanded the return of over $1 million in overpayments because the facility submitted claims for patients who did not qualify for home health services.6 According to the indictment, the provider was never operational during the pandemic, yet it received over $37,500 from the Provider Relief Fund—funds that were then given to family members for personal use.7 This type of scrutiny is likely to continue. And as recipients of the Provider Relief Fund are required to submit attestations and reports to the government, they should remain vigilant to ensure the funds they received are used in accordance with the terms and conditions of the grant, and that all attestations and reports are accurate.
Counterfeit Vaccines, Medical Supplies and Vaccination Records
Counterfeit medical supplies and counterfeit vaccination records are a threat to the health and safety of the public, particularly at a time when health concerns are already at an all-time high. Internationally, counterfeit COVID-19 vaccines have already been identified, and this practice may worsen as the vaccination rollout continues. In April, Pfizer Inc. identified the first confirmed instances of counterfeit versions of its vaccine in Mexico and Poland.8 And as businesses make return-to-work plans and schools welcome back students, knowing how to spot counterfeit medical supplies may prove critical so that only authentic medical supplies are used to combat the spread of COVID-19 and other infectious diseases in these spaces. Vaccine hesitancy and the possibility of vaccine mandates in the education, work and travel spheres have already generated schemes to manufacture and distribute counterfeit COVID-19 vaccination cards—schemes that may result in prosecutions.
Counterfeit Medical Supplies
For consumers of medical supplies, guidance from the Federal Bureau of Investigation (FBI) and the Centers for Disease Control and Prevention (CDC) may prove helpful in spotting counterfeit goods. When the pandemic first began, the FBI issued a press release alerting health care professionals of the increased potential for fraudulent sales of COVID-19-related medical equipment and providing a list of red flags to watch out for, such as unusual payment terms, last-minute price changes, last-minute excuses for delay in shipment, and an unexplained source of bulk supply.9 The CDC also issued guidance to help consumers spot counterfeit respirators, noting that a respirator may be counterfeit if there are no markings designating the respirator as a National Institute for Occupational Safety and Health (NIOSH)10 approved device.11 The CDC also noted that when buying medical supplies from third-party marketplaces or unfamiliar websites, buyers should watch out for warning signs like a listing claim that the medical product is “legitimate” or “genuine,” and whether the seller seems to market trendier items rather than consistent items over a longer period of time.12 As the guidance notes, “legitimate businesses and distributors typically sell what they know and stay consistent with their stock over time.”13 Consumers can use these tips to help ensure they are buying genuine products.
Government agencies involved in preventing and prosecuting counterfeit goods include DOJ, the U.S. Department of Homeland Security (DHS), and U.S. Customs and Border Protection (CBP). DOJ’s International Computer Hacking and Intellectual Property program also coordinates with foreign counterparts to help crack down on COVID-19 scams and has conducted webinars for prosecutors and law enforcement in Asia, Africa, Europe and South America.14 Last June, for example, a Chinese manufacturer was charged with producing and exporting to the United States 495,200 counterfeit masks that purported to be N95 respirators that were also falsely stamped with the NIOSH and U.S. Food and Drug Administration (FDA) logos.15 The manufacturer was charged with three counts of violating the Federal Food, Drug and Cosmetic Act for causing misbranded and substandard respirators purporting to meet the N95 standard to be imported into the United States, and one count of filing misleading registration documents with the FDA.16 In February, CBP officers in Ohio seized over 100,000 counterfeit 3M surgical masks that were destined for a company in Canada.17 If these masks had been genuine, their retail value would have been over $130,000.18 Signs that these masks were counterfeit included the statement “Made in the USA” when the merchandise was imported from Hong Kong, as well as a fake 3M seal and fake model numbers.19 These types of investigations and prosecutions are likely to continue.
Counterfeit COVID-19 Vaccination Cards
Airlines also have to contend with a rise in fraudulent COVID-19 test results. In early May, for example, an incident led to the arrest of an American Airlines traveler upon arrival in Argentina.20 The manufacturing, distribution and use of counterfeit COVID-19 vaccination cards may also be on the rise, in part because there is no centralized database to track legitimate records. In March, the FBI released a public service announcement that those who make or buy a fake COVID-19 vaccination card not only endanger others but also violate the law.21 The FBI specifically cited to Title 18 U.S. Code Section 1017, which makes a crime the unauthorized use of an official government agency’s seal, such as the U.S. Department of Health and Human Services’ (HHS) seal or the CDC’s seal, both of which are prominently displayed on legitimate vaccination cards.22
In what appears to be the first of these cases, on May 5, 2021, the San Joaquin County District Attorney’s Office in California arrested a bar owner for allegedly selling fraudulent COVID-19 vaccination cards and charged him with multiple crimes, including identity theft, forgery of government documents and falsification of medical records.23 Although there is no benchmark yet for how prosecutors may charge those who buy or use a fraudulent vaccination card, forgery, falsification of medical records and unauthorized use of an official agency’s seal may all be in play. Prosecutors may also look to communicable disease statutes and general criminal laws—including assault and battery, reckless endangerment, harassment, and disorderly conduct—to charge individuals who use fraudulent vaccination cards despite having COVID-19 on the grounds that the individual recklessly or intentionally spread the virus. And in the case of the traveler who flew from Miami to Argentina recently relying on a COVID-19 test result he knew was false, immigration officials say he could face three to 15 years in prison under an Argentine law barring people from knowingly exposing others to infectious diseases.24
As state and federal agencies continue to investigate and prosecute COVID-19-related health care fraud, recipients of governmental funds should pay close attention to the regulations associated with the funding, consumers should remain diligent that the products they purchase are in fact genuine, and all should be wary of any opportunities that sound too good to be true.
1 Justice Department Takes Action Against COVID-19 Fraud, https://www.justice.gov/opa/pr/justice-department-takes-action-against-covid-19-fraud (Mar. 26, 2021).
2 CARES Act, Pub. L. No. 116-136, 134 Stat. 281, 116th Cong. (2020).
3 See CARES Act Provider Relief Fund: For Providers, U.S. Department of Health and Human Services (HHS), https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/for-providers/index.html, which provides the terms and conditions for the various distributions.
5 Woman First in the Nation Charged with Misappropriating Monies Designed for COVID Medical Provider Relief, https://www.justice.gov/opa/pr/woman-first-nation-charged-misappropriating-monies-designed-covid-medical-provider-relief (Feb. 11, 2021).
8 Pfizer Identifies Fake Covid-19 Shots Abroad as Criminals Exploit Vaccine Demand, https://www.wsj.com/articles/pfizer-identifies-fake-covid-19-shots-abroad-as-criminals-exploit-vaccine-demand-11619006403 (Apr. 21, 2021).
9 FBI Warns Health Care Professionals of Increased Potential for Fraudulent Sales of COVID-19-Related Medical Equipment, https://www.fbi.gov/news/pressrel/press-releases/fbi-warns-health-care-professionals-of-increased-potential-for-fraudulent-sales-of-covid-19-related-medical-equipment (Mar. 27, 2020).
10 NIOSH is responsible for conducting research and making recommendations for the prevention of work-related injury and illness. See NIOSH Regulations, https://www.cdc.gov/niosh/regulations.html#:~:text=The%20National%20Institute%20for%20Occupational,work%2Drelated%20injury%20and%20illness (Mar. 28, 2018).
11 Counterfeit Respirators/Misrepresentation of NIOSH-Approval, https://www.cdc.gov/niosh/npptl/usernotices/counterfeitResp.html (May 3, 2021).
12 Additional Tips for Spotting Counterfeit Respirators, https://www.cdc.gov/niosh/npptl/usernotices/AdditionalTips.html (Apr. 21, 2020).
14 Justice Department Takes Action Against COVID-19 Fraud, https://www.justice.gov/opa/pr/justice-department-takes-action-against-covid-19-fraud (Mar. 26, 2021).
15 Chinese Manufacturer Charged with Exporting Misbranded and Defective Masks Falsely Purporting to be N95 Respirators, https://www.justice.gov/usao-nj/pr/chinese-manufacturer-charged-exporting-misbranded-and-defective-masks-falsely-purporting (June 5, 2020).
17 108,000 Counterfeit 3M Surgical Masks Stopped by Cincinnati CBP, https://www.cbp.gov/newsroom/local-media-release/108000-counterfeit-3m-surgical-masks-stopped-cincinnati-cbp (Feb. 18, 2021).
20 He faked a coronavirus certificate to fly to Argentina, officials say. He was infected all along, https://www.washingtonpost.com/nation/2021/05/05/argentina-covid-flight-florida-vaccine/ (May 5, 2021).
21 If You Make or Buy a Fake COVID-19 Vaccination Record Card, You Endanger Yourself and Those Around You, and You Are Breaking the Law, https://www.ic3.gov/Media/Y2021/PSA210330 (Mar. 30, 2021).
23 Agencies Make Arrest in Fraudulent COVID-19 Vaccination Card Case, https://www.sjgov.org/da/press-release?id=34191 (May 5, 2021).
24 He faked a coronavirus certificate to fly to Argentina, officials say. He was infected all along, https://www.washingtonpost.com/nation/2021/05/05/argentina-covid-flight-florida-vaccine/ (May 5, 2021).