For more than a year, a 49-year-old Georgia man allegedly ran a thriving scheme in which he referred patients to medical testing facilities in return for lucrative kickbacks.
Beginning in February, federal prosecutors said, Erik Santos set his sights on a new potential money-maker: the coronavirus.
Santos, according to court documents filed this week in New Jersey, arranged to be paid kickbacks for each COVID-19 test referred when they were bundled with other, more expensive respiratory examinations.
“While there are people going through what they are going through, you can either go bankrupt or you can prosper,” Santos allegedly boasted during a March 19 telephone call, referring to the pandemic. “Everybody has been chasing the Covid dollar bird.”
Indeed, as the deadly virus has spread across the globe and killed more than 5,000 people in the U.S., all manner of criminal schemes, many of them stoking fear and panic, have been taking root in its widening wake.
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Authorities in Kentucky have been investigating drive-up testing sites, promising same-day results for $250. A Texas-based website was offering a coronavirus “vaccine,” until authorities won a restraining order against its operators. In Virginia, telephone scammers, posing as local hospital representatives, warned residents of possible virus exposure and sought to lure them to sham test sites.
“The pandemic is dangerous enough without wrongdoers seeking to profit from public panic, and this sort of conduct cannot be tolerated,” Attorney General William Barr said in a memo to federal prosecutors across the country last month, urging a crackdown on a constellation of schemes targeting the public.
Coronavirus-related fraud attempts seen at federal, state levels
As part of the federal effort, the Justice Department has directed all 94 U.S. attorneys to appoint a coordinator for all virus-fraud cases in their districts, raising the prospect that those who threatened or attempted to spread the virus could be charged with federal terrorism offenses as the virus could be classified as a biological agent.
“Capitalizing on this crisis to reap illicit profits or otherwise preying on Americans is reprehensible and will not be tolerated,” Deputy Attorney General Jeffrey Rosen said in a separate memo to federal prosecutors last week.
The scams, however, have not been confined to federal jurisdictions.
In Louisville, Kentucky, officials advised resident this week to avoid a number of pop-up coronavirus testing sites.
Two medical marketing companies offering the tests, including one that promised results in 24 hours, charged up to $250 per exam for people who were exhibiting symptoms. The testing sites were scattered across the area, including one at a local gas station.
Local Metro Council President David James told The Louisville Courier Journal that the tests are scams.
A spokeswoman for Mayor Greg Fischer’s office said that the city had received calls about multiple pop-up testing sites and that police were investigating for “further review and possible action.”
“At this time, we are advising residents experiencing symptoms to seek COVID-19 testing from hospitals, health care providers or government resources,” city spokeswoman Jessica Wethington said.
In New York, the current epicenter of the U.S. coronavirus outbreak, state Attorney General Letitia James on Thursday ordered a Utah company to halt the marketing of a product offered as an effective treatment for COVID-19.
“By misrepresenting the effectiveness of products against COVID-19, companies like Finest Herbalist are giving consumers a false sense of security, putting their very lives at risk,” James said.
The attorney general asserted that the company “targeted consumers through email campaigns, text messages, and bogus news websites,” proclaiming the product’s effectiveness. James said the company offered “protection from the corona virus with immunity oil,” and urged prospective customers to “fight back against the coronavirus outbreak” using the so-called “Pure Herbal Total Defense Immunity Blend.”
Trying to profit from the ‘widespread fear surrounding COVID-19’
James also said authorities had issued “cease and desist notifications” to hundreds of businesses in the state for charging excessive prices for hand sanitizers, disinfectant sprays, and rubbing alcohol in violation of New York’s price gouging law.
“That statute prohibits the sale of goods and services necessary for the health, safety, and welfare of consumers at unconscionably excessive prices during any abnormal disruption of the market,” the attorney general said.
The company, Finest Herbalist, could not immediately be reached for comment Thursday, but a call center associated with the company’s products said it was still taking orders.
In the first federal action targeting virus-related fraud last month, Justice Department officials filed a civil complaint in Austin, Texas, against operators of the website coronavirusmedicalkit.com, alleging a scheme that sought to “profit from the confusion and widespread fear surrounding COVID-19.”
Information allegedly published on the website, which can no longer be accessed, offered prospective buyers World Health Organization (WHO) vaccine kits in exchange for a shipping charge of $4.95.
“In fact, there are currently no legitimate COVID-19 vaccines, and the WHO is not distributing any such vaccine,” federal authorities said.
Prosecutors said the website featured a photograph of Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health, to promote the marketing effort.
The site, according to court documents, was registered by NameCheap Inc., based in Phoenix.
The company could not be reached for comment.
Contributing: Brad Zinn, (Staunton, Virginia) News Leader