Who Is Keeping Their Eyes on Government Spending at Home and Abroad?

April 1st, 2020 by Pamela Coyle Brecht

In the midst of the COVID-19 pandemic, businesses and individuals around the world are rising to the occasion and ordinary people are doing extraordinary things. We have seen first responders, emergency room physicians, nurses, grocery store workers, and mail carriers go above and beyond their call of duty. One Pennsylvania manufacturer of major league baseball uniforms donated millions of dollars of fabric and labor and converted its operations to medical masks and gowns for healthcare workers; recognizing the fragile psyche of taxed cities, the Phillies’ pinstripes will stay in Pennsylvania and the Yankees’ will go to New York. However, parallel to these uplifting endeavors, there is a darker side of this historic pandemic – the underbelly of society seeking to take advantage of national, local, and state governments dealing with a crisis that is unprecedented in its medical, economic, and social impact.

The public, employees of providers of essential services, and government agencies need be on the lookout to detect and report fraud related to COVID-19. Several government agencies have vocalized this call for vigilance including Europe’s Interpol, which recently announced an investigation of at least 30 large-scale fraud schemes in Europe and Asia, and The United States Department of Justice. The Department of Health and Human Services Office of Inspector General (HHS-OIG) has also issued a COVID-19 Fraud Alert to warn against unscrupulous suppliers of testing kits and unapproved treatments, and the Treasury Department has alerted home-bound taxpayers to be vigilant when receiving offers of tax assistance in the midst of the pandemic.

Providers who bill the government or recipients who will be paying for goods and services with government funds are particularly susceptible to fraud schemes.  Essential service providers in the financial and healthcare sector including industrial cleaning companies called to disinfect public places, healthcare suppliers setting up makeshift hospitals around the country, and construction companies will need to have in place appropriate audit processes for both products and labor to maintain additional vigilance during these times.

Congressional Action

The U.S. Congress recently enacted legislation, the Coronavirus Aid, Relief and Economic Security (CARES) Act, which will release $2 trillion in federal funds into the economy at every level including corporations ($500 billion), state and local governments ($339.8 billion), public health ($153.5 billion), and small businesses ($377 billion). It should be noted with this disbursement of funds that not all U.S. dollars will land within the borders of the United States; many suppliers have corporate headquarters around the globe. As supplies and personnel are shifted from areas where COVID-19 is less of a threat, to U.S. cities over the next weeks (or dare we say months), providers based in other countries may be receiving these government dollars. Extraordinary people in ordinary places will also need to come forward to report fraud, waste and abuse in these unprecedented times.

The False Claims Act

The federal False Claims Act, more than two dozen state statutes that mirror that law, and even some municipal statutes have frameworks built in for whistleblowers to bring fraud, waste, and abuse to the attention of government prosecutors.  There are processes in place to facilitate the filing of false claims even during the pandemic. It was in the midst of the great Civil War that the False Claims Act came into existence to respond to unscrupulous suppliers who provided sawdust instead of rifles to Union soldiers.  Our first responders to COVID-19 deserve no less.

If you are aware of any person, corporation or entity that you think may be violating the Federal False Claims Act or a State False Claims Act, you should contact an attorney who can assist you in evaluating your potential claim. Be careful not to discuss the matter with anyone other than an attorney. CONTACT US TODAY.

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