U.S. Attorney Bryan Schroder Announces Efforts to Prosecute Hoarding and Price Gouging Associated with COVID-19

Anchorage, Alaska – U.S. Attorney Bryan Schroder announced a new effort to investigate and punish wrongdoing related to the Coronavirus (COVID-19) pandemic.  The Department of Justice, in response to a March 23, 2020 Executive Order signed by the President, has created a task force charged with addressing hoarding and price gouging associated with COVID-19.

“The Department of Justice, and the U.S. Attorney’s Office in Alaska, will not tolerate those who try to take advantage of the COVID-19 pandemic to defraud the people of our state,” said U.S. Attorney Schroder.  “The pandemic continues to cause anxiety and uncertainty across the country.  At a time when our country needs to join together, it is repugnant that fraudsters will try to take advantage of our communities.  The U.S. Attorney’s Office, along with our law enforcement partners in Alaska and beyond, will root out these schemes and bring the criminals to justice.”

The Executive Order gave the Department means to fight misconduct pursuant to section 102 of the Defense Production Act, which prohibits hoarding of designated items. The order authorizes the Secretary of Health and Human Services (HHS) to protect scarce healthcare resources and medical items by designating particular items as protected under the statute. Once an item is designated, it becomes a crime under the statute 50 U.S.C. §§ 4512, 4513 for any person to accumulate that item either (1) in excess of his or her reasonable needs or (2) for the purpose of selling it in excess of prevailing market prices. 

In response, HHS announced a list of designated health and medical resources necessary to respond to the spread of COVID-19 that are scarce and would be subject to these hoarding prevention measures:

• N-95 Filtering Facepiece Respirators;
• Other Filtering Facepiece Respirators (e.g., those designated as N99, N100, R95, R99, R100, or P95, P99, P100);
• Elastomeric, air-purifying respirators and appropriate particulate filters/cartridges;
• Powered Air Purifying Respirator (PAPR);
• Portable Ventilators;
• Chloroquine phosphate or hydroxychloroquine HCl;
• Sterilization services for certain medical devices and certain sterilizers;
• Disinfecting devices and other sanitizing and disinfecting products suitable for use in a clinical setting;
• Medical gowns or apparel, e.g., surgical gowns or isolation gowns;
• Personal protective equipment (PPE) coveralls, e.g., Tyvek Suits;
• PPE face masks, PPE surgical masks, PPE face shields, PPE gloves or surgical gloves;
• Ventilators, anesthesia gas machines modified for use as ventilators, and positive pressure breathing devices modified for use as ventilators, ventilator tubing connectors, and ventilator accessories.

In a March 24, 2020 Memorandum to all U.S. Attorneys, Attorney General William P. Barr stated that the Department is beginning to receive reports of individuals using the crisis to hoard vital medical items and then make inappropriate, windfall profits at the expense of public safety and the health and welfare of our fellow citizens. 

In this memorandum, Attorney General Barr directed the creation of the COVID-19 Hoarding and Price Gouging Task Force, which will address COVID-19-related market manipulation, hoarding, and price gouging.  Each U.S. Attorney’s Office, including the District of Alaska, has been directed to designate an experienced attorney to serve as a member of the task force.  The task force will develop effective enforcement measures, best practices, work closely with HHS as they designate particular items and equipment, and coordinate nationwide investigation and prosecution of these illicit activities.

U.S. Attorney Schroder urges Alaskans to be vigilant in reporting any COVID-19 related hoarding or fraud activities.  Criminals will likely continue to use new methods to exploit COVID-19 worldwide.

If you think you are a victim of a scam or attempted fraud involving COVID-19, you can report it without leaving your home though a number of platforms:

• The Alaska Health Care Fraud Task Force seeks to identify health care fraud offenders and pursue investigations against them through partnerships with local, state, and federal agencies. Complaints, tips, and information related to health care fraud may be reported online at tips.fbi.gov or by calling the FBI Anchorage Field Office at 907-276-4441. Learn more at www.fbi.gov/AHCFTF.
• Contact the National Center for Disaster Fraud Hotline at 866-720-5721 or via email at disaster@leo.gov;
• If it's a cyber scam, submit your complaint through https://www.ic3.gov/default.aspx.

To find more about Department of Justice resources and information, please visit: www.justic.gov/coronavirus.