NYLJ Publishes Article on the Rise of COVID-19 Fraud Schemes Amid the Pandemic by Robert Appleton


The New York Law Journal published a White Collar article authored by Olshan litigation partner Robert Appleton entitled “COVID-19 Fraud Schemes Rise Amid Pandemic.” The article discusses the various schemes that marketers and other parties have used to gather information for their own benefit. Mr. Appleton noted that “as of June 3, the Federal Trade Commission had logged 536,000 consumer complaints related to COVID-19 and stimulus payments, more than 71% of them involving fraud or identity theft, with an estimated cost of more than $464 million in losses.” As we consider the traditional fraud schemes that many of the perpetrators typically use, COVID-19 has ultimately led these parties to make use of technology, such as cell phones and the Internet, to further elaborate upon their schemes. These claims are usually tied to COVID-19 relief products, the scarcity of goods, and relief funding designed to “alleviate financial distress from the pandemic, as well as efforts to help recipients expedite the receipt or maximize the use of COVID-19 relief funds.” Mr. Appleton went on to mention the importance of the COVD-19 Consumer Protection Act (CCPA) as part of the 2021 Consolidated Appropriations Act, and how there was an, “anticipation of a focus by perpetrators preying on those affected by the pandemic.” With the passage of this act, the federal government has acquired additional measures to be able to counteract the efforts of scammers, but as Mr. Appleton stated, “the statue has not yet proved an effective deterrent, however, given the skyrocketing number of allegations and referrals. The reported data thus far, as well as our own experiences in such cases, shows that the pandemic has brought new COVID-related adaptions to more traditional fraud conduct as well as a shift in the nature, types, and sophistication of the fraud schemes that are being perpetrated. From our own practice, we see emerging trends: from new deceptive health and safety claims to new offers to capitalize on economic distress to new trends in the digital/Internet space.” The article goes on to discuss advanced payment schemes and how they’ve been modified in the wake of the pandemic, and also describes how these scammers have continued to “re-tool” these schemes to fit the pandemic. The author concludes, “it remains to be seen whether these schemes are here to stay or will be replaced by even newer methods as the pandemic wanes. One thing is for sure, the pandemic has ushered in greater use of digital means in fraud schemes, and an increase in cross border fraud, triggering an urgent need to be vigilant, proactive and sensitive to such efforts, initiate relevant controls, and take prompt action when red flags of fraud emerge.” Mr. Appleton is actively involved in representing fraud victims and helps companies and individuals trace and recover lost funds due to fraud. He also assists companies design compliance mechanisms to prevent these new fraud schemes, and also responding to incidences when they happen – including cyber breaches.

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