by Megan Kelly, Manager, Sobel & Co, LLC

The novel coronavirus has presented incredible challenges for humans across the globe, both on a health and well-being level and an economic level. Unfortunately, scammers kick into high gear during times of crisis, preying on people in fear in order to steal money during a time when millions of Americans are already in a financial crisis.

From January 1, 2020 through April 15, 2020, the Federal Trade Commission has received 18,235 reports of COVID-19 related fraud, with losses totaling approximately $13.44 million dollars. The top complaint categories include travel, online shopping, and imposter scams, where a scammer pretends to be someone else, typically in this case a government agency, in order to commit a fraud.

The following are some of the common frauds that have emerged during the COVID-19 pandemic:

Fake GoFundMe Pages

Even before the COVID-19 pandemic, it was very common to see GoFundMe pages created for the families of those who have died in order to support them financially, whether the funds are for funeral costs or to support children who may have lost a parent. These pages are typically shared on social media, and I have seen many of them since the start of the coronavirus pandemic.

Unfortunately, it is very easy to create fake GoFundMe pages that appear to be very real. Jersey City Councilman Michael Yun passed away from complications related to COVID-19, and just one day after his passing, scammers set up fraudulent GoFundMe pages in the name of his daughter-in-law. His family confirmed that they had not been trying to collect funds through GoFundMe.

If you are on Facebook and come across a GoFundMe page seeking funds to support individuals that have been directly affected by COVID-19, do some research into the page before making an immediate donation. Confirm the legitimacy of the fundraiser organizer or consider reaching out to the impacted individuals directly.

Phony Vendors Selling High Demand Products

After being in quarantine for over a month now, it is still frustratingly difficult to find products like toilet paper and cleaning products in the stores. In addition to these products, hospitals continue to experience shortages of the critical protective equipment that is necessary to ensure that healthcare workers can safely perform their duties. These demands have led to a rise in fake vendors claiming they have these products available for purchase online in order to capitalize on urgent needs.

The FBI has advised consumers to be on the lookout for suspicious activity, including:

• Unusual payment terms.
• Last-minute price changes.
• Last minute delays in shipment.
• Unexpected source of bulk supply.

Federal investigators in Louisiana and Georgia arrested a 39 year-old man on April 10th on wire fraud criminal complaint charges.  Officials said that the man attempted to sell millions of respirator masks to the Department of Veterans Affairs in exchange for large, upfront payments. However, the man never actually had the available equipment.

If you come across a suspicious vendor selling these products, you can submit a tip to the FBI online at tips.fbi.gov.

COVID-19 Test Kit Schemes

Now months in to dealing with COVID-19 in the United States, it remains difficult to obtain a test for the virus, even for those that are symptomatic. Scammers are using the desperation of those trying to get tested as a way to either turn a quick profit or steal personal information. Per the FBI, beware of individuals contacting you directly about COVID-19 testing. These people will likely ask for health insurance or other personal information.  It is extremely important not to share this information with anyone other than your healthcare providers.

Additionally, do not purchase COVID-19 test kits from the internet. Scammers are now attempting to sell test kits online.  Currently, no at-home COVID-19 tests have been approved by the FDA. In Michigan, the Attorney General’s Office had to send a letter to a business owner ordering him to stop the sale of COVID-19 at-home test kits, which he was selling for $25 each, claiming they were 96.3% accurate. The business owner maintained that these tests were in the process of being approved by the FDA. However, no one at the FDA had any knowledge of this business owner or the approval of his test kits.

If you are symptomatic and trying to get tested for COVID-19, contact your healthcare provider or a legitimate testing facility.

COVID-19 Treatment Schemes

Medical professionals and scientists are working around the clock to find a treatment and a cure for COVID-19. A confirmed, consensus treatment does not yet exist, and this has given snake oil salesman an opportunity to peddle fake “cures” for COVID-19 on the internet. The New York Times analyzed registrations with a company called Shopify, which allows users to quickly create retail websites, and found that there were nearly 500 new sites registered in the last two months with names that include “corona” or “COVID”. Some of the items the Times noted for sale on these sites included a $59 “Corona Necklace Air Purifier” and a $299 pill that promised thirty days of “anti-viral protection”.

On March 22nd, the Department of Justice filed its first enforcement action related to COVID-19 fraud against operators of a fraudulent website that claimed to offer consumers access to World Health Organization vaccine kits in exchange for a shipping charge of $4.95, which consumers would pay via credit card.

Additionally, the FDA has had to issue warning letters to several companies selling products that they claim can cure, treat, or even prevent diseases like COVID-19. Some of the products that were cited in these warning letters were teas, essential oils, tinctures, and colloidal silver.

The FBI noted that when an approved treatment or cure becomes available for COVID-19, the first time you hear about it will likely not be through an online advertisement or an unsolicited pitch from a stranger. Always consult your healthcare provider or the U.S. Centers for Disease Control and Prevention when in search of medical advice, rather than a post on Facebook from your neighbor’s cousin’s friend.

Stimulus Check Theft

Now that many Americans are receiving stimulus checks from the government, the Internal Revenue Service has issued a warning regarding potential stimulus check fraud and theft. The IRS noted two specific opportunities for criminals, who may:

• Try to get you to sign over your check to them (if you receive a physical check).
• Use this as an opportunity to get you to “verify” your filing information in order to receive your money.

The IRS will not call you to verify any of your bank account details. If you receive a purported call from the IRS requesting your bank account information, end the call. Scammers are also contacting stimulus recipients claiming that the individual owes a debt to the IRS which can be paid via the economic impact check. It cannot be stressed enough – the IRS will not contact you via telephone demanding your bank account details or the return of your stimulus check.

Coronavirus Phishing Scams

As people seek more information regarding the coronavirus, cybercriminals have been generating phishing emails surrounding COVID-19 designed to steal your personal information. Phishing is the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information. Per Consumers Reports, many COVID-19 related phishing emails appear to be from the World Health Organization (WHO) or The Center for Disease Control (CDC), pretending to offer new information about the virus. The emails include some kind of prompt asking the recipient to either download a file or click on a link for further information.  Some of these emails even prompt the receiver to enter log-in credentials. Clicking links or offering up personal information gives criminals access to not just your personal information, but if you are on a work computer, information held by your company as well.

In order to avoid getting scammed by phishing emails, carefully examine emails, especially those with links or information requests, before taking the next step, and do not open any unknown attachments.

Prevention

We have enough to worry about right now without adding fraud into the mix, but there are steps that you can take to mitigate your exposure to fraud. Some of those steps include:

• Independently verifying and researching vendors, companies, or individuals soliciting money related to COVID-19.
• Ensuring that anti-malware and anti-virus software is up to date and functioning on your computer.
• Avoiding links or unknown attachments in emails.
• Buying supplies from reputable, known sources.
• Protecting your personal information by not sharing it with strangers, or those claiming to be from a government agency.
• Ignoring offers for COVID-19 test kits, vaccines, cures, or treatments from an unknown source.

You can also report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud hotline (1-866-720-5721) or by emailing the NCDF at disaster@leo.gov. Be aware that times of crises are unfortunately when people are most vulnerable to fraud and do your best to stay vigilant to protect yourself.

Megan Kelly is a manager at Sobel & Co., LLC. She specializes in forensic accounting and valuation services.  Should you have any questions concerning this article, please feel free to contact Megan Kelly at megan.kelly@sobelcollc.com or (973) 994-9494, ext. 154.