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Americans Are Losing Millions to COVID-19 Scams

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3 years ago

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  • Coronavirus-related scams have cost Americans nearly $39 million, according to a report from the FTC.
  • The SEC has also seen increased complaints about misconduct as a result of the pandemic, noting that fraudsters often “exploit difficult situations” for their own financial gain.
  • Some scams include robotexts pretending to be the IRS, which lure people to give their information under the belief that it will allow them to receive their stimulus check.
  • In one case, a man was arrested for allegedly attempting to defraud New York City out of $45 million in a scheme to sell protective gear, that was not even in his possession, at a jacked rate.

FTC Says Americans Lost $39 Million

As the novel coronavirus has spread throughout the United States, so have scams relating to the pandemic, leading to millions of dollars lost and, in some cases, arrests.

Federal Trade Commission says they have received over 52,000 complaints related to the coronavirus, resulting in Americans losing nearly $39 million in scams. The majority of their complaints are about fraud, and of all the fraud complaints they receive, roughly 45% resulted in a financial loss. Their report, which was released on May 21, states that the median loss per person is $470.

Many of the scams have to do with travel and vacation. There were 8,196 reports pertaining to this kind of scam, resulting in $14,239 lost. Online shopping trailed behind as the second most reported scam, as well as the second-highest loss. 

People aged 30-39 lead the pack in reporting this behavior, followed by people aged 40-49. However, the age groups that ended up losing the most money were the 60-69 age bracket, followed by those who are 50-59. 

SEC Complaints Increase

The FTC is not alone in fielding COVID-19-related complaints. According to Reuters the Security and Exchange Commission says they have seen 4,000 complaints from mid-March to mid-May, which is a 35% increase from that same time period last year.

“Unfortunately, fraudsters often seek to exploit difficult situations like the ongoing pandemic for their own gain,” one SEC spokesperson told Reuters. 

The SEC believes that this has to do with the increase in complaints, and that the far-reaching scale of this crisis has created an influx of misconduct.

Reuters’ report indicated that the SEC also thinks the complaints can be attributed to an increase in whistleblowers due to unemployment. They say that many of their tips come from people recently laid off reporting on issues with their former employers. Because they are no longer employed by these companies, they no longer fear facing punishment at work and are freer to speak.

The SEC is expecting to deal with a variety of misconduct, which could include “loan fraud, price-gouging, counterfeit or substandard medical goods, or healthcare fraud.”

Right now, they’ve created a new group that looks out for misconduct. The efforts of this group have led to the suspension of trading in “31 so-called penny stocks for allegedly touting dubious COVID-19 cures, tests, treatments and medical supplies to investors.”

The SEC told Reuters that they charged two organizations related to this, Applied BioSciences Corp and Turbo Global Partners Inc.

COVID-19 Scams Uncovered

As for what kind of scams people should be on the lookout for in their day-to-day lives, CNBC warned of a new robotext scam that is fooling people into thinking they were communicating with the Internal Revenue Service.

The text states the IRS needs you to confirm information about your stimulus check. It then takes you to a realistic-looking IRS website that asks for personal details like your Social Security number. CNBC says that after this, to make the scam look all the more legitimate, it takes you to the real IRS website. 

However, it’s not just robot messages and calls landing people in hot water. In New York, the Department of Justice arrested a man who had a massive scheme to defraud the city of $45 million dollars.

The man, who has been identified as a used car salesman in New Jersey named Ronald Romano, allegedly attempted to “deceive and price gouge New York City into paying him and his co-conspirators approximately $45 million for personal protective equipment that Romano did not possess and was not authorized to sell.”

This scam allegedly began in February, when Romano tried to obtain mass quantities of personal protective equipment for resale, like N95 respirators.

In March he created a fake letter saying his company was authorized to sell all of this PPE. A statement from the DOJ says that brokers on his behalf approached the city, “which at the time was in critical need of legitimate, potentially lifesaving PPE, including respirators, in order to supply frontline healthcare workers and first responders during the COVID-19 public health emergency.”

Romano and his conspirators allegedly made many false representations about their PPE and had fake references. He had plans to jack the prices of the PPE significantly. 

“Romano hoped to get profit quickly through the scheme,” the statement said. “As he described in a message to a co-conspirator, ‘I’m working on a few deals that if I get any of them you might be buying a Ferrari.’”

Romano was charged with one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to violate the Defense Production Act. The first two charges each carry a maximum prison sentence of up to 30 years while the last has a maximum of just one year. 

“At a time when the pandemic was ravaging New York City, this defendant greedily preyed on the City’s desperate need for protective equipment to stop the spread of the virus,” said Margaret Garnett, the Commissioner of the New York City Department of Investigations. “There is no tolerance, at any time, in particular during this crisis, for individuals who seek to victimize this City by holding essential workers’ safety hostage to price-gouging and fraud.”

See what others are saying: (CNBC) (Reuters) (Forbes)

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Survey and Census Data Shows Record Number of Americans are Struggling Financially

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1 week ago

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May 23, 2023

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Americans are choosing not to pursue medical treatment more and more frequently as they encounter money troubles.

A recent federal survey shows that a record number of Americans were worse off financially in 2022 than a year prior.

Coupled with recent census data showing pervasive poverty across much of the country, Americans are forced to make difficult decisions, like foregoing expensive healthcare. 

According to a recent Federal Reserve Bureau survey, 35% of adults say they were worse off in 2022 than 2021, which is the highest share ever recorded since the question was raised in 2014. 

Additionally, half of adults reported their budget was majorly affected by rising prices across the country, and that number is even higher among minority communities and parents living with their children.

According to recent census data, more than 10% of the counties in the U.S. are experiencing persistent poverty, meaning the area has had a poverty rate of 20% or higher between 1989 and 2019. 

16 states report at least 10% of their population living in persistent poverty. But most of the suffering counties were found in the South — which accounts for over half the people living in persistent poverty, despite making up less than 40% of the population. 

These financial realities have placed many Americans in the unfortunate situation of choosing between medical treatment and survival. The Federal Reserve study found that the share of Americans who skipped medical treatment because of the cost has drastically increased since 2020. 

The reflection of this can be found in the overall health of households in different income brackets. 75% of households with an income of $25,000 or less report being in good health – compared to the 91% of households with $100,000 or more income. 

See what others are saying: (Axios) (The Hill) (Federal Reserve)

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Montana Governor Signs TikTok Ban

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2 weeks ago

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May 18, 2023

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The ban will likely face legal challenges before it is officially enacted next year. 

First Statewide Ban of TikTok

Montana became the first state to ban TikTok on Wednesday after Gov. Greg Gianforte (R) signed legislation aimed at protecting “Montanans’ personal and private data from the Chinese Communist Party.”

The ban will go into effect on Jan. 1, 2024, though the law will likely face a handful of legal challenges before that date. 

Under the law, citizens of the state will not be held liable for using the app, but companies that offer the app on their platforms, like Apple and Google, will face a $10,000 fine per day of violations. TikTok would also be subject to the hefty daily fine. 

Questions remain about how tech companies will practically enforce this law. During a hearing earlier this year, a representative from TechNet said that these platforms don’t have the ability to “geofence” apps by state.

Roger Entner, an analyst at Recon Analytics, told the Associated Press that app stores could have the capability to enforce the restriction, but it would be difficult to carry out and there would be a variety of loopholes by tools like VPNs.

Montana’s law comes as U.S. politicians have taken aim at TikTok over its alleged ties to the CCP. Earlier this year, the White House directed federal agencies to remove TikTok from government devices. Conservatives, in particular, have been increasingly working to restrict the app.

“The Chinese Communist Party using TikTok to spy on Americans, violate their privacy, and collect their personal, private, and sensitive information is well-documented,” Gov. Gianforte said in a Wednesday statement. 

Criticism of Montana Law

TikTok, however, has repeatedly denied that it gives user data to the government. The company released a statement claiming Montana’s law “infringes on the First Amendment rights of the people” in the state. 

“We want to reassure Montanans that they can continue using TikTok to express themselves, earn a living, and find community as we continue working to defend the rights of our users inside and outside of Montana,” the company said. 

The American Civil Liberties Union condemned Montana’s law for similar reasons. 

“This law tramples on our free speech rights under the guise of national security and lays the groundwork for excessive government control over the internet,” the ACLU tweeted. “Elected officials do not have the right to selectively censor entire social media apps based on their country of origin.”

Per the AP, there are 200,000 TikTok users in Montana, and another 6,000 businesses use the platform as well. Lawsuits are expected to be filed against the law in the near future.

See what others are saying: (Associated Press) (Fast Company) (CBS News)

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How a Disney-Loving Former Youth Pastor Landed on The FBI’s “Most Wanted” List

Published

1 month ago

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April 24, 2023

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 “Do what is best, not for yourself, for once. Think about everyone else,” Chris Burns’ 19-year-old son pleaded to his father via The Daily Beast. 

Multi-Million Dollar Scheme 

Former youth pastor turned financial advisor Chris Burns remains at large since going on the run in September of 2020 to avoid a Securities Exchange Commission investigation into his businesses.

Despite his fugitive status, the Justice Department recently indicted Burns with several more charges on top of the $12 million default judgment he received from the SEC. 

Burns allegedly sold false promissory notes to investors across Georgia, North Carolina, and Florida. The SEC claims he told the investors they were participating in a “peer to peer” lending program where businesses that needed capital would borrow money and then repay it with interest as high as 20%. Burns allegedly also reassured investors that the businesses had collateral so the investment was low-risk. 

The SEC says that Burns instead took that money for personal use. 

Burns’ History 

Burns began his adult life as a youth pastor back in 2007 before transitioning into financial planning a few years later.  By 2017, he launched his own radio show, The Chris Burns Show, which was funded by one of his companies, Dynamic Money – where every week Burns would “unpack how this week’s headlines practically impact your life, wallet, and future,” according to the description. He also frequently appeared on television and online, talking about finances and politics. 

The SEC alleges that he used his public appearances to elevate his status as a financial advisor and maximize his reach to investors.

His family told The Daily Beast that he became obsessed with success and he reportedly bought hand-made clothes, a million-dollar lakehouse, a boat, several cars, and took his family on several trips to Disney World. His eldest son and wife said that Burns was paying thousands of dollars a day for VIP tours and once paid for the neighbors to come along. 

Then in September 2020, he reportedly told his wife that he was being investigated by the Securities Exchange Commission but he told her not to worry. 

The day that he was supposed to turn over his business documents to the SEC, he disappeared, telling his wife he was just going to take a trip to North Carolina to tell his parents about the investigation. Then, the car was found abandoned in a parking lot with several cashier’s checks totaling $78,000

FBI’s Most Wanted

The default judgment in the SEC complaint orders Burns, if he’s ever found, to pay $12 million to his victims, as well as over $650,000 in a civil penalty. Additionally, a federal criminal complaint charged him with mail fraud. Burns is currently on the FBI’s Most Wanted list. 

Last week, the Justice Department indicted him on several other charges including 10 counts of wire fraud and two counts of mail fraud. 

“Burns is charged for allegedly stealing millions of dollars from clients in an illegal investment fraud scheme,” Keri Farley, Special Agent in Charge of FBI Atlanta, said in a statement to The Daily Beast. “Financial crimes of this nature can cause significant disruptions to the lives of those who are victimized, and the FBI is dedicated to holding these criminals accountable.”

His family maintains that they knew nothing of Burns’ schemes. His wife reportedly returned over $300,000 that he had given to her. 

She and their eldest son, who is now 19, told The Daily Beast they just want Burns to turn himself in, take responsibility for his actions, and try to help the people he hurt. 

“Do what is best, not for yourself, for once. Think about everyone else,” Burns’ son said in a message to his father via The Daily Beast. 

See what others are saying: (The Daily Beast) (Fox 5) (Wealth Management)

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