March 27, 2020

Fraud In A Post COVID-19 World

While scammers are out there marking up hand sanitizer and surgical masks, there is a much larger risk of fraud looming in the future.

Congress is contemplating a $2 trillion economy saving, stimulus package and nobody outside of congress knows exactly where the money will go. That amount of money is more than the annual budgets for both the Department of Defense and Medicare/Medicaid combined. While most every American is expecting a check in the mail at some point in the near future, many hundreds of billions will be distributed to corporations, large and small, across the country. One can be sure that fraudulent claims will abound.

Where there are large budgets, there are larger frauds. Enforcement actions in healthcare range from a woman falsely billing medicaid for a few thousand dollars, to multi-million dollar kickback schemes for medical devices. According to a Department of Defense Report, during the five year period from 2013-2017, there were 1,059 criminal cases of defense contracting fraud resulting in the conviction of 1,087 defendants, including 409 businesses. Fraud is big business.

I spoke with Joel AndrophyBerg & Androphy, who represents whistleblowers who have reported fraud. Androphy thinks that this new stimulus program represents a huge opportunity for fraud to occur. The stimulus is being negotiated behind closed doors and the public is only briefed after senior congressional members emerge to tell us of their decision. It’s not very transparent and we will all have to live with the outcome. It is like waiting to see the color of smoke coming out of a Sistine Chapel chimney to see if the College of Cardinals made their decision on a pope.

Law firms that represent whistleblowers who report fraud to the government involving health care providers, defense contractors and others in industries dependent on government funds, should know the plan for how the money will be allocated. “There is an opportunity now to put protections in place,” Androphy said.


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