As CPAs and their clients work through the massive business changes brought on by the coronavirus pandemic, they also need to be extra vigilant for fraud.
While the virus continues to spread across the United States, it has been accompanied by a growing number and variety of fraud schemes, according to U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania.
“Over the past few weeks, there has been a significant number of frauds committed across the country related to the coronavirus pandemic,” McSwain said Friday in a news release.
Scammers are taking advantage of the pandemic to steal money and private information from people and businesses in schemes such as identity theft, health care fraud, fake charities, and securities fraud, according to federal officials.
Phishing scams have also been reported, where fraudsters pose as representatives from large institutions, such as the World Health Organization or the Centers for Disease Control and Prevention, to trick victims into downloading malware or providing personally identifying and financial information.
In a March 16 letter to all U.S. attorneys, Attorney General William Barr noted the importance of detecting, deterring, and punishing this type of wrongdoing.
“The pandemic is dangerous enough without wrongdoers seeking to profit from public panic, and this sort of conduct cannot be tolerated,” Barr wrote.
Accountants and other members of the public should be on the lookout for these scams and report them to the proper agencies. One way to help identify scams is to check the AICPA Forensic and Valuation Services Coronavirus (COVID-19) Resource Center, and you can use the following resources if you encounter a potential scam or fraud involving the coronavirus.
National Center for Disaster Fraud
You can report any coronavirus-related complaints to the U.S. Department of Justice’s National Center for Disaster Fraud hotline at 1-866-720-5721 or email disaster@leo.gov. Hotline staff will share your complaint with the relevant law enforcement officials, who will review the information.
IRS
The IRS is warning about a surge of COVID-19–related calls and email phishing attempts that can lead to tax-related fraud and identity theft. Individuals who receive unsolicited emails, text messages, or social media messages that attempt to gather taxpayer information and appear to be from the IRS should forward the message to phishing@irs.gov. The IRS also maintains a webpage with information on phishing and online scams.
SEC
You can submit tips about coronavirus scams using the SEC’s complaint form. Complaints may include situations involving:
- Fraudulent or unregistered offer or sale of securities, including things such as:
- Ponzi schemes.
- Pyramid schemes.
- High-yield investment programs.
- Theft or misappropriation of funds or securities.
- Manipulation of a security’s price or volume.
- Insider trading.
- False or misleading statements about a company, including false or misleading SEC reports or financial statements.
- Failure to file required reports with the SEC.
- Bribery of, or improper payments to, foreign officials.
- Fraudulent conduct associated with municipal securities transactions or public pension plans.
If you want to submit information about possible fraud, the SEC asks that you include the following:
- Your full name and contact information, including mail and email addresses, and telephone numbers. Or you can submit your tip anonymously.
- Contact information for any individual or company you mention in the tip or complaint, including their full name, mail and email addresses, and telephone numbers.
- A detailed description of the events or circumstances giving rise to your complaint — including who was involved in the conduct and how, why, and when the conduct occurred.
- Any relevant documentation.
FBI Internet Crime Complaint Center (IC3)
If you know of a potential internet scam, the FBI’s Internet Crime Complaint Center accepts online complaints. Internet crimes include any illegal activity involving websites, chat rooms, emails, etc. to communicate false or fraudulent representations to consumers. The crimes may include advance-fee schemes, nondelivery of goods or services, computer hacking, or employment/business opportunity schemes, according to the FBI.
If you file a complaint, you will be asked to provide the following information:
- Victim’s name, address, telephone number, and email.
- Financial transaction information (e.g., account information, transaction date and amount, and who received the money).
- Subject’s name, address, telephone number, email, website, and IP address.
- Specific details on how the person was victimized.
- Email header(s).
- Any other relevant information you believe is necessary to support the complaint.
You should keep any evidence related to the complaint, including:
- Canceled checks.
- Credit card receipts.
- Money order receipts.
- Certified or other mail receipts.
- Wire receipts.
- Virtual currency receipts.
- Prepaid card receipts.
- Envelopes (if you received items via FedEx, UPS, or U.S. Mail).
- Faxes.
- Pamphlets or brochures.
- Phone bills.
- Printed or preferably electronic copies of emails (if printed, include full email header information).
- Printed or preferably electronic copies of webpages.
- Hard-drive images.
- Network, host system, and/or security appliance logs.
- Copies of malware.
- Chat transcripts and/or telephone logs.
FBI
If you have information about a potential scam or attempted fraud involving the coronavirus, you can report it to the FBI’s online tips.
Federal Trade Commission (FTC)
The FTC takes consumer complaints about the coronavirus and shares them with local, state, federal, and foreign law enforcement partners. Tips can be submitted using an online form.
US Postal Inspection Service
If you suspect mail fraud involving the coronavirus, visit the U.S. Postal Service’s website and fill out an online form. It will ask for your information and what you received in the mail.
— Kelly Hinchcliffe is a freelance writer based in North Carolina. To comment on this article or to suggest an idea for another article, contact Drew Adamek, a JofA senior editor, at Andrew.Adamek@aicpa-cima.com.
