Transcripts For CSPAN2 Senate Judiciary Committee Hearing On Exploitation Of Coronavirus Pandemic 20240712

On cspan2 at 9 30 a. M. The Dc Circuit Court of appeals heels oral arguments in the perjury case against Michael Flynn and at 1 00 a virtual townhall with virginia senator mark warner and representative gerry connolly. Next a look at efforts to combat fraud and exploitation during the coronavirus pandemic with officials from the Justice Department, fbi and us secret service. They testified on price gouging, the hoarding of personal protective equipment and the filing of fraudulent applications under the paycheck protection loan program. The Senate Judiciary hearing is just under two hours. Good morning, thank you very much for attending the hearing and more will come in throughout the morning. Mister craig carbonito, phil hughes, associate attorney general, assistant director of the criminal investigative division, fbi, the assistant director of the office of investigations of the United States secret service. We are talking about this before, fraud related to the cares act, scams against seniors, selling masks that dont work, playing on peoples fears. When you try to do some good people take advantage of it and we will hear from our folks today about what is going on out there and ideas about how to make sure it stops if it can. Phase 4 will be coming. There is need for phase 4. I want to learn as much as we can about the paycheck Protection Program, supplemental Unemployment Benefits, how those programs are sometimes being abused and generally what people are doing out there to scan americans and that is the purpose of the hearing and i will turn it over. I will put my statement in the record so you can proceed. Do i hear from anybody . Lets start with mister hughes. Good morning mister chairman, Ranking Member feinstein and members of the committee. Thank you for inviting me to appear before you to discuss federal Law Enforcement efforts to deter, detect and prosecute those who violate federal law by exploiting the covid19 pandemic and the economic dislocation it caused. Before i focus on the topic of the day i want to address the tragic killing of george floyd. Is attorney general william barr and Deputy Attorney general rosen said that video images of the Police Conduct in this instance are incredibly disturbing. As the attorney general previously announced the department is conducting a parallel and independent investigation into this incident in collaboration with the fbi to determine whether federal civil rights laws were violated and conduct that investigation as swiftly as possible and not sparing any resources. George floyds death was not the first of its kind and it exposes concerns that reach far beyond this specific incident. The outrage mister floyds death triggered is real, legitimate and deeply rooted, the vast majority of Police Officers do their job honorably in accordance with the law, and the criminal justice system. America takes pride in the law being a bedrock principle and as the nations leading federal Law Enforcement agency the department of justice is committed to seeking justice for mister floyd and his loved ones and secure the confidence of all americans in Law Enforcement. I know these issues are important to you, they are important to us. We welcome the opportunity to have discussions on this subject in the days ahead but today for this hearing are subject is the pandemic, the related economic disruption, those that wish to exploit others during tremendously challenging times. The attorney general made clear that notwithstanding the operational challenges the pandemic presents it is critical the department is vigilant in detecting, investigating and prosecuting wrongdoings related to the crisis. It has become a high priority for us. Since the early days of the pandemic we have been receiving reports of individuals and businesses using the crisis as an opportunity to exploit americans and Government Programs designed to assist americans that have been hardhit. Leveraging the publics concerned about the pandemic, prosecutors realize many seems to separate americans from the money in their bank accounts, from their government benefits and from their personally identifiable information. Other fraudsters and unscrupulous opportunists have gotten into the personal protective equipment trade looking to defraud and price gouge health providers, First Responders and other essential workers who have no choice but to pay astronomical prices for protective equipment their Health Depends on. We are seeing schemes the target taxpayer backed relief programs that provide americans and american businesses financial help as they whether a disruptive economy. In particular fraudsters are targeting the Payroll Protection Program, the Economic Impact payment program, state unemployment benefit programs lose the pandemic has also changed the cyber threat landscape, stayathome orders, and opportunity to prey on children. With all american businesses to attack and infiltrate business Computer Networks to steal or hold hostage i am sure you will agree is reprehensible, to use this as an opportunity to profit at another personal expense or prey on the public. The department of justice will not tolerate it and it is efforts to coordinate across to permit offices and components to collaborate with other Government Agencies and engage with industry and the public. We are bringing cases to hold fraudsters accountable and disrupt their schemes. We will be doing so for the foreseeable future. I thank you for the invitation and look forward to your questions. Good morning, chairman graham, Ranking Member feinstein, i am the United States attorney for the district of new jersey. I was appointed by william barr to lead the department for a Price Gouging Task force. Im glad to appear you for you today to discuss efforts to detect and prosecute those who before financial gain, exploit the covid19 pandemic and economic dislocation it has caused. The attorney general and Deputy Attorney general leading this effort and we are honored to help them in that vital task. We want to thank the committee were to attention to these issues and the good work of the permit of justice to protect the safety and security of our nation during this unprecedented crisis. Before i answer your questions today, i would like to acknowledge the senseless and tragic death of george floyd at the hands of the minneapolis police. Im proud of the people of new jersey who have raised their voices in peaceful protest seeking justice and reform in the name of mister floyd and other victims like him. I hear and appreciate the call for change. In new jersey we have witnessed Productive Community and Law Enforcement partnerships in cities like newark and camden. These partnerships lowered crime and restored trust. Was we in new jersey are proud of these efforts, we recognize we must and will do more. Let me turn to the reason im here today. We have seen a broad range of illegal conduct in the past few months. Our strategies and responses have defaults to meet new challenges but our core philosophy has not. The department will investigate and prosecute those who seek to treat covid19 as an opportunity to defraud the public and the government. The department has received many reports of individuals and businesses using the crisis to seek windfall profits at the expense of Public Safety and the health and welfare of the american people. These reports range from the sale of fake cures to covid19 online to hoarding and price gouging of critical medical supplies, to defrauding the cares act economic programs. The department is aggressively investigating those reports and already commenced prosecutions. The departments attorneys work sidebyside with our partners at the federal bureau of investigation and the United States secret service as well as other federal, state, local Agency Partners. Make no mistake the fight against covid19 is a fight to save precious lives every day. Our medical professionals and First Responders put their own lives at risk to stand between the virus in each of us. The personal protective equipment they where is the only shield they have to protect themselves as they bravely go facetoface with the virus. It helps to ensure our heroes do not fall victim to the disease and also helps to ensure they do not bring it home to their families and their broader communities. Hoarding and price gouging in particular having headed frontline healthcare professionals, essential workers and the public from acquiring supplies they need to protect themselves from contracting the virus, hospitals, First Responders and retail consumers have been targeted by individuals who view the scarcity of critical medical materials as a path to get rich quick. This conduct has disrupted our supply chains and markets and jeopardize the safety of our communities. In response attorney general william barr, Deputy Attorney general rosen a simple as a mishaps hoarding, Price Gouging Task force to combat and prevent hoarding and price gouging, the task force is comprised of over 100 experienced federal prosecutors throughout the nations 90 us Attorneys Offices and Department Components in washington. The task forces primary mission is to identify, investigate, and prosecute illegal hoarding and price gouging of crucial medical supplies including personal protective equipment like facemasks that are essential to preventing the spread of the virus. We do so in a larger context of the Public Health crisis. Decision the department makes to open investigations or bring charges to help the Public Health response. The task forces focusing on profiteering, especially Market Participants who sell scarce materials for excessive crisis that far exceed reasonable cost. The task force is investigating counterfeit, misbranded or different medical supplies imported into the us from abroad. These are entering the stream of commerce and create safety hazards. We will use all the tools at our disposal to identify these products and those who transact them here and abroad and hold them accountable. Depart efforts are ongoing, but they yield substantial result, we have brought several federal, cases across the country alleging price gouging, fraud, misbranding and other charges. The task force commenced the departments first criminal prosecution against a foreign manufacturer for sending defective, misbranded n95 masks during the pandemic. Instead of protecting our medical professionals these materials would have silently put them in harms way. We have seized ordered materials and worked with Agency Partners to distribute them to those on the front lines to fight covid19. I look forward to answering your questions. Mister rivers. Good morning, members of the committee. My name is calvin shivers of the criminal investigative division. Thank you for the opportunity to appear before you today to discuss the fbis response to covid19 related fraud. The head of the fbi criminal investigative division, i always see the fbi financial crimes fraud against Government Programs. In my role as assistant director of the Criminal Division i also oversee civil rights, color of law and he crime investigations. It is important i take a moment to address the recent events the grab the nations attention before i focus on issues surrounding todays hearing. I along with my colleagues at the fbi offers an serous condolences to the family and friends of george floyd. The fbi Civil Rights Program has a long and proud history of protecting the rights of the american people. As primary federal Agency Responsible for civil rights investigations, we at the fbi are committed to utilizing investigative and intelligence capabilities to address violations of federal civil rights laws. In pursuit of justice we are conducting a thorough investigation into the actions that led to George Floyds death. The fbi recognizes the rights of citizens to exercise their First Amendment rights and we will continue to work to protect our citizens in their Dirksen Senate Office Building exercise those rights free of violence. Now i will shift to the topic at hand. These are unprecedented times for most americans. Due to covid19 people are understandably worried about their health and livelihood although we are coming together in various communities and throughout the country, unfortunately there are individuals who seek to export our anxieties and fears by selling fake covid19 cures and vaccines. They are also peddling fraudulent Investment Opportunities in companies purportedly working to develop yours to vaccines for covid19. These are the earliest covid19 fraud schemes the fbi identified. When the attorney general issued a memorandum on march 16th of this year directing us attorneys to prioritize covid19 related fraud investigations and prosecutions the fbi was ready. Within days, all 56 fbi field offices began working a wide range of investigations related to covid19 fraud schemes. As we begin the investigation we saw a number of different criminal schemes, hoarding personal protective equipment or ppp and attempting to sell it at exorbitant prices. We saw people selling counterfeit or substandard ppe, the fbi worked with the department of justice and other Law Enforcement partners to conduct price gouging investigations or sees counterfeit ppe, there is direct economic assistance for American Workers and Small Businesses. There are individuals who seek to steal money from those the cares x was designed to help. We began to see fraudsters shift their efforts toward exploiting the programs created to relieve the severe economic effects of covid19. To effectively target this, a Payroll Protection Program for coordination with the department of justice fraud section and Small Business Administration Office of Inspector General. Investigations have been initiated in 126 million, identified. There is fraudulent billing for services, charges for necessary procedures and fraud related to telemedicine. In addition to fraud schemes we are seeing crimes targeting our children. School closures increase the presence of children online. In addition social distancing restrictions and isolation of children at home, an opportunity to sexually exploit Vulnerable Children and we are proactively countering this through investigations and working to educate the public regarding the warning signs and the danger of online sexual exploitation. These threats are numerous and evolving rapidly, the fbi is vigilant in addressing these crimes and holding individuals who commit these crimes accountable. We rely heavily on Public Education and awareness. When the general public is made aware fraudulent schemes and collectivity they are better situated to report them. For that reason i am incredibly appreciative of the opportunity speak with you today. I think you for bringing attention to this and answer any questions you might have. Thank you, Ranking Member feinstein interesting list members of this committee, before i begin, like my colleagues i like to express my deep sadness and frustration with the tragic events of recent weeks. Having served in government for 29 years nothing troubles me more than police misconduct. It severely roads the essential trust necessary for Law Enforcement to protect and serve our communities. Law enforcement must be held to the highest standard, racism and discrimination in any form is totally an acceptable. Secret service is committed and bound to ensure all americans are afforded Constitutional Rights to equal treatment under the law and freedom of speech and assembly. Those rights are inalienable and no duties higher for a Law Enforcement officer than to protect them. Returning to the subject of this hearing, thank you for inviting me to speak about the current wave of covid19 related crime and the work of the secret service to counter it. As early as february of this year the secret service identified individuals and groups seeking to exploit the pandemic for illicit profit. We quickly took action to build the capacity and strategy necessary to combat but we anticipated criminal activity, major disasters long invited fraud. From terrorist attacks on 9 11 to hurricanes katrina and maria, criminals throughout history have used public emergencies as opportunities to defraud the public. The fraud associated with current covid19 pandemic prevents the scale and scope we have not seen before. Enabled by the internet, they are defrauding anxious citizens to stressed businesses and government stimulus programs alike. Since we released our first alert on march 4th we observed significant cooperation of criminal schemes, in particular weve seen a surge in crimes targeting various Economic Relief programs like those provided by the cares act. Countering this fraud has become investigative work and continuing for years. The secret service in addition to protective mission is responsible for the investigation of criminal violations pertaining to the financial system. The secret Service Includes our network of Financial Crimes Task forces which conduct specialized investigations of cyber and financial crimes with the immediate investigative focus of the secret service is to disrupt and deter criminal activity that could hinder an Effective Response to the pandemic by assisting organizations that risk of fraud and working to recover any funds stolen from americans. We will ensure those who commonly exploited this crisis are arrested and successfully prosecuted. I am pleased to report the secret service has seen tremendous success emerge from investigative efforts to date, we initiated 100 criminal investigations and prevent approximately 1 million in fraud losses. Among other Law Enforcement actions the secret service successfully disrupted hundreds of online covid19 related scans, halted illicit sale of test online, and the state unemployment systems they released intelligence and alerts for industry, consumers and Law Enforcement partners with best practices to defend themselves from the latest kernel threats. We are not achieving these results by ourselves, we can credit much of our success to the partnerships we built, with Industry Partners and in particular working closely with various agencies of the department of treasury, Cyber Security and Infrastructure Security Agency and Homeland Security investigations as well as various offices of the Inspector General from the department of labor and Small Business administration and my colleagues to the right in the department of justice, there have been essential partners. I ensure the secret service is doing our part. People, activities pointing s pandemic. I look forward to answering your questions and we can Work Together to address this threats. [inaudible]. Thank you. All start with the secret service pretty can you give me some examples of how people are taking advantage of this Protection Program. We primarily right now focus im sorry. Right now its mainly stolen identity in which criminals are utilizingg stolen eii, thinks they have acquired whether it be the dark web, whether it be Network Intrusions and theyre using those stolen information to apply for Social Security benefits and probably across right now about 29 states across the country that we have seen. Its not very complex front. Its the availability of pii out in public that allows this to occur. Is anything this committee can do to help you in this endeavor . Do you have all the tools you need in current law . We have the tools right now that we need for this particular do you have the resources . Av we have the resources with the partnerships we created whether it be department of labor as well as the answer is yes, right . Okay. The answer is yes. Mr. Shivers, appreciate what you all are doing at the fbi. When it comes to Consumer Fraud, what are you saying most of . On the Consumer Fraud your mic, please. As as a genomic opening, on Consumer Fraud, initially private citizens were targeted to a number of schemes. Many of those schemes included offers to sell counterfeit covid19 cures and vaccines. As i mentioned in the opening also Investment Opportunities. What we see is a wide range of citizens being targeted through a number of means is that Getting Better or worse for about the same . I think covid19 has shined a light on an opportunity for criminals to take advantage of the specific type of scheme. What we see as number of ways of their reaching individuals through unsolicited phone calls, unsolicited emails. Theres a wide range. What we asked the public to do is make reports and that gives us greater visibility on the nature of threats is anything the committee can do do have the tools . We do. Thank you. Mr. Carpenito, is that right . Tell us about the fraudulent sales going on out there. Whats going on in terms of overseas activity . What we see with regards to price gouging is the trance of indicator to that initially what we had was fraud relating to a spike in the prices of materials. Materials. In this country we essentially have supply chain that consisted of major suppliers of these masks, three by mass, just like these, that were commoditized product that were sold relatively cheap prices, pennies to our First Responders and our medical professionals. They were easy to obtain and they were something that i think were taken for granted as part of our system. What happened was justf like any scenario weve seen in a countrys history where we have a National Crisis, theres always going to be that dark underbelly that rises to the top and tries to profit illicitly from the theaters of folks that are most impacted by the pandemic. What happened here was a bunch of interlopers in the market camee in, obtain mass quantities of these materials and held onto them, raised the prices and price gouged. These masks went from being . 60 apiece f to selling for seven dollars, eight dollars a size 25 25 in some cases. What weve done is we got the word out about the defense production act, the fact it makesct it illegal to do that, o price gouge, and weve opened up a series of p investigations. We have been out there to try and fight any stockpiles if they exist and get them at your back into the supply chain. Do you have the tools you need to continue down this path . We do. The defense production act gives us the ability to bring this conduct to light and to remedy it. Mr. Shivers, can you tell us about the paycheck Protection Program, what kind of problems have you seen there . Yes. What weve seen our fraudulent filings from individuals who are either exaggerating the number of employees that have within their business or perhaps they dont have any employees. Whatpl theyre doing is taking advantage how do you find out about these cases . Its a wide range. Part of it is outreach the fbi conducts with the Banking Sector and with thein private sector. One of the things we do is we formed relationships with Financial Institutions and provided them with the training, having an idea of what to look for, some of the front indicators. Part of it is a relationship. The other part of that relationship is with the Small Business Administrations Office of inspector. General, and so through coordination with s bas oig we are also receiving information that helps us open cases. Le]. Are looking out of a score. If you could get back to the committee. If theres anything you dont have in terms of being able to deal with us, let us know. If you need more stuff the snow. But generally speaking, how do we stand with the resources and tools necessary to oversee these programs. I think the answer is yes, and tara graham we really appreciate the support. Its been a number of legislative proposals this but in this discussion one of which is increasing deterrence by increasing sentencing guidelines for fraud committed prayed and during National Emergencies, we look forward to discussing the list of things you think would help. In my 26 years on this committee mr. Chairman, i have never seen anything quite like this. If i understand it, the federal trade commission as reported that as of june 7, consumers have lost nearly 8 million. Due to coronavirus related to fraud. In this includes offers for axing the test kits, cures, air filters and were falsely advertised. Its been an acceptable price gouging basic items. Like hand sanitizer. Sophisticated schemes targeting state government. Understand washington say for example, criminal use stolen personal information while fraudulent unemployment names. It is on the non. And then you have, the nigerian fraud ring known as scattered canary. They use personal information likely from consumer databases. That was primarily done. Its bizarre. Why is this so unique to have all of this. What is there in this program that attracts the taxes kind of broad effort. Fraud effort. I think theres a he things going on here. When you have a pandemic which is rightfully a major concern and basically every americans life is affected. Is a lot of unknown still about covid19. He also have an economic destruction which rightfully sparks serious response from the federal government in the way of Economic Relief. So those two events its time you tenuously created a situation where the consumers out there, they are anxious about their own health. They are so broad a base in your comments. Nothing is specific. You a specific. Apparently washington say, was able to recover 300 million that had paid for fraudulent crimes related to once again. What other big fraud it cases are out there. And what is done to stop it. We are doing several things. First is that we have hundreds of investigations open all of the department of justice. We are working with every single Law Enforcement agency. In the executive branch we are pursuing separate courses, investigations, monitoring the trends. Talk to me for a minute about scattered canary. This nigerian fraud ring. So senator, im unable to discuss specifics of any particular matter or potential target. But i will say is not especially with respect to unappointed benefits fraud, their strong indication that some of the perpetrators are overseas entities or organizations and that they are using and putting mules and standard mechanisms to transfer money outside the country. The nigerian fraud ring thomas is scattered canary of our enduring fraud ring. Im not personal knowledgeable as to the organization. Happy to take questions. Does anybody know about this. Yes senator bernie and no specific information to confirm those particular activities. Summa could you tell us what you know pretty. What you know is that product as you stated senator, it was essentially stolen credit already in public. Our weather is particular off of the dark web in these particular crimes. Then they are utilized to file fraudulent insurance unemployment claims. That money has been gone through money mules as has already been said. Have they been fraudulently obtained hundreds of millions of dollars in unemployment events. Melissa gentlemen answer the question just know. I cannot answer to the exact amount. I can tell you that the secret Service Based on things that we published, in the late may, the information we received back from over 100 Financial Institutions, the mitigated the loss of about 500 million in payments. So thats information we received from the Financial Institutions. How did Washington State covered the 300 million that it and paid in fraudulent claims related to one of these skeins. Can anybody answer that question. I dont think we have that information and are under tips. We can take it back and discuss it with her colleagues. I have been prepared for a while. I have never seen anything like it. It is filled with riddles and fraud. Put 3 trillion out there, people will take advantage of its. I will share your frustration. We would like to know what can we do. What is going on and he was doing and how widespread is this pretty. That is right. And could any of you gentlemen summarize what is going on and what it will take to stop it read. Thats an incredibly broad question. Were talking with cares act fraud, theres targeting the Payroll Protection Program by fraudsters misrepresenting their Small Business or the characteristics of their Small Business or misrepresenting Small Business. There are fraudsters who are using pii that theyve accumulated their pots on the internet to apply for unemployment benefit programs that are statesponsored there are number schemes relating Economic Impact payments. Again relying on by supply for these payments or to defraud subpoenas of those payments. To have those over to the fraudsters. Let me ask you this. The ftc, reported as of june 7, consumers have lost nearly 48 million due to coronavirus related to fraud. That includes scams for vaccines, discus, marble cures, air filters, that were falsely advertised. They are capable of moving covid19 from the air in peoples homes. So there all these fraudulent Business Practices out there. What is being done to stop them to arrest and convict predict. We are vigorously investigating and using the pool so we have both criminal and civil. When you bring a prosecution, you have hours to be your go to play or a break in trials guilty. The social side you have such as this allow you to make the fraudster for it illgotten gains in order to disrupt we have sent you its allows us ultimately an injection. The quicker solution to stopping some of the seams. Many are involved in on line websites which is the major marketing mechanism in some these fraudsters. Information of happy for me, ive never had before me and 20 years. In honor, if its worth continuing. How to stop it. Maybe i can help to respond. And you indicate to us on many cases have been brought and convictions of change. We received thousands of referrals plymouth out there. Right away, right when the pandemic came to date, attorney general election good leadership in forming to task force. One relating to general fraud and related covid19 and the other mike has worked relating to the hoarding price gouging which was we had to set a very quickly to try to get valuable ppe to the individuals who needed it as quickly as possible. Those programs have approximately hundred profiteers each of them. They are focusing on the covid19 related crimes. It takes some time to work with a whitecollar case. In has to be done overtly. It is know what to do anything to disrupt the network of criminals before we can get a hold for the money is in detroit pretty specially for the oversea cases. Working expeditiously. I can tell you narrow hundreds of investigations in my task force alone. And thousands nationally relat related. We have also formed a partnerships without state attorney general to share information, and whitecollar cases like this. It is critical to be able to get to the money. Because at the end of the day thats what this is about. Willing to prevent individuals, prevent Government Programs from the same in this is already happen, we need to cooperate with Law Enforcement to work with Financial Institutions to trace those transactions. I know it can be frustrating at times. But one of the reasons we can get into specifics is because our network operates to the ability to state covert. And upon this money and before we go into the court and go public we have everything locked down. Love around t i have heard tt the resources that you need, and you have the that you need. I hope that thats right. Time will tell. Thats true, that is very nice. Start out with a complement to the Justice Department and something similar related to the pandemic. In the things that might not be related but i want to, met people that are doing the jobs. I voice felt theres enough publication in a culture and history. Also, the department of justice announced that what they refer to as civil investigative demand of the four largest meatpackers in the nation. They have about 80 percent of the Banking Industry is water industry in the country as a whole. Theres plenty of reason to believe that there might not be things are there in a month ago the price of beef went down about 60 percent rated the price to the consumer when up about 2d march 31st 2 that attorney. Done that for about 20 years. Both parties pretty hard to getting any results whatsoever. So can imagine how surprised i am but thankful for this administration taking are making those moves to make sure that the marketplaces working in that industry because farmers are very depressed by some of the things that are happening in that industry. His only go to april 7, senator, chart sent a letter expressing are concerned about price gouging in hoarding of the essential medical supplies. Mr. Information from the departments implementation of the president s executive order. Not received a response. Im hopeful we will get that soon. It is important that congress has this data. We appreciate when agencies are equipped quick to share information with us. Our request for that information. For example the secret service has been very good about giving us uptodate on the covid19 related fraud efforts. Encourage the Justice Department and the va to follow that example. To anyone of the three from the Justice Department can respond. Opinion tell me when we will get a response or april 7th letter. I do not know the answer to that question. But i can say when we receive letters, they are reviewed and work start some replies promptly. If they have to go through one process. Just an, i mean, than what we would all like. We have your letter and i understand is being worked on. I can check on at this hearing as to the status. Also did anybody the Justice Department and are the fbi witnesses. I am interested in the difficulties or obstacles have you encountered when investigating in these cases. Thank you senator reid said critically, thankfully because the indication of this act, is given us the tools we need to investigate and prosecute price gouging. An of the act is what made with the intent to sell materials that are designated of health and human services. That that act we wouldnt be able to operate. The challenges that we have are the same challenges you have in any sort of a Disaster Relief related fraud situation. We based in new jersey, after Hurricane Sandy. And as senator graham correctly stated, when you put the money out into because you have to take care of society, take care of those who are desperately in need of it pretty cockroaches are going to compounded of the dark and come into the light. Theres always somebody on the underbelly who come out. Were using the traditional tools and partners rule out those frauds. It takes time. Because there is a delay in the exposure. Follow the trend in the money. With regard to price gouging when you think we should very aggressive stance pretty we brought our first prosecution within a week of invitation and defense production act. Johnson on march 23rd to march d materials and on april 1st we arrested the first person selling exponentially ppe. When assaulting a fellow general officer because individual hot he told him that he had covid19 to back them away from him. We were able to recover close to a million pieces of ppe. And then redistributed them within 48 hours. I dont know which one of you can answer this. But i believe chinas decision to halt exports, the store hospitals including health and safety of our workers a serious risk. Its a reasonable to believe that the increase in bank supplies, when a direct result of chinas decision on whether the exports to the medical supplies and if not why not. Whichever one of you can answer that. We cannot talk about any of our investigations the nonpublic. What i can tell you on friday, filed a criminal complaint against the Chinese Companies for the importation of fraudulent him 95 respirators. We alleged that the chinese coming sent to the United States on health insurance. They reported to fbn 19 respirators. Sublicensing pontiff and materials and make them the most attracted to the medical professionals. What medical professionals i sent you need that 95 percent filtration to protect our doctors, nurses, First Responders from interacting directly with the virus. These materials were imported with intent to sell into the medical professionals. When we seem to them, didnt look as though they were authentic materials. I work with the fbi and fbi unaccustomed border patrol, then the materials tested. And they failed and do intend to continue to investigate and importation of fraudulent materials. I think you can play to see additional cases coming into the future. 3 trillion on the table and then watched the cockroaches come in. Youve identified six prosecutions. The ppe act so far. Fourmac million loans have been issued so far. You just Getting Started. It strikes me that unless you big powerful statement early on, some of the adolescent efforts being made to quantify for ppe loans, are just going to continue apace. I will address the ppe. So with that program, there are a number of ways that we have referral cases and potential prosecute. If you will tell you that we have field offices around the country in the complaint is walk in saying that that they are aware with wrongfu second sourct we share among federal agencies predict acting kid in the more specifics on thats pretty. You collected and get your least is important but not critical to answering my questions. Is this pace of six prosecutions for several months and four and a half million loans, indicate just Getting Started and it with us in base that you think will warrant not to cheat the government pretty. Think were just Getting Started for the foreseeable future we will be bringing these cases, the limitation times are between five and ten years. And we are engaging extensively to ensure that the public understands the serious consequences of exploiting this program. Do this more publicly, call attention to it. This exportation, in your testimony, is almost laughable. I can assure you there are plenty of investigations going on. Is just silly efforts to exploit the government in belief that its an easy thing to do. Invent companies and payrolls. Seems to me to be fairly traceable. Let me go to another aspect i want to hear this. When i got raped a few years ago but major corporations in the United States he told me that. Massive, in this country the tonic form made exclusively by one company were being sold in volumes on the internet by people who were not date and identified. There were only made by one company. We had to be the change of congress are more. There would be over hundreds, it was not just a casual sale. And when these companys would after this ring, their stuff told by amazon, facebook and ebay who said no obligation to disclose the names of our sellers. No obligation. He made reference to profitsharing online. Like amazon and facebook. March 25th from a group of 34 attorney general wrote those three companies cures them to do more of price gouging on their platforms. That would allow customers to report is gouging. When comes to those who are using the internet to sell misrepresented qualities. I can tell you from day one of the task force, engage private corporations including online retailers to talk to them about what their policies were and how to identify those instances. And sought to create a referral relationship. Without getting into specifics until you have been cooperating. And weve received referrals pretty. So now theyre disclosing sellers in the are violating her blade to violate the law. I feel refrain about this. But we have engaged and we are working with them on referrals. For years retail theft, it doesnt matter who selling what even if its clearly stolen goods. If youre telling me when breakthrough your money comes to this enemy, and National Emergency to those who misrepresent products on the internet, the cooperation of these cell places on these marketplaces, i think we need to know one way or the other. Facebook, ebay, have to disclose a Law Enforcement when theres the obvious sale in the marketplace of goods either stole her being misrepresented to the consumers of america. For example, cleared products and it turns out its a big old lie. Some of these places in the past would not even tell you who the sellers were. They claim is confidential and private. Question. Od mr. Carpenito. What i can tell you is what the bill help thate he talking about . Is a problem . In my experience, the department of justice can use process. We can send subpoenas. With mechanisms to obtain that information when justified where receipt indications of fraud or any indications that theres been wrongful conduct. This, this new development if you do. Tell you home depot came to me, no small company, and said stolen goods with our brand made only by us sold on ebay in volume and they wont tell us who selling them here if thats a change this is a breakthrough. I agree. See if you can follow up. Will do. Senator tillis. Thank you, mr. Chairman. Thank you for being here and the work youre doing. I was actually pleased to be all bring up a number of the members focusing on counterfeit goods. That something i focused a lot on as chair of the intellectual sproperty subcommittee. This is not something new to the covid response. I literally saw a biking helmet that was marketed as one of the most protected and you bought it from specialize said that the job. As a summaryryze just put their foot on the sum and a crushed the force and mckinley. Lot of counterfeit products coming from china that are clearly a threat to our Public Health and now its only on steroids in response to the covid. Pandemic. One question or a couple of questions i have come to talk about the ppe and the n95 masks. Protective equipment is something with folk somebody also worried about counterfeit medications, the tension when we breakthroughs on therapeutics, counterfeit versions of those. They may actually fit the bill but not being distributed according to licenses. In other cases they may just be inadequate or ineffective. I think the same risk would hold true in terms of test gets in some of the other materials that were put together for the covid response. Can you tell me about how we are specifically focusing on that, and whether my suspicion is chine is a great threat but any other jurisdictions we should be looking at . Let me address briefly pharmaceuticals and testing and i will allow mr. Carpenito for the rest of failed to address ppe. Were working very closely with the sba. They have taken a more flexible regulatory approach to help spur innovation in thede medical deve come in the pharmaceutical space. The types of crimes in a that were focusing on are the obvious scams, clearly fraudulent products or medications. We are trying to disrupt those quickly, largely would bring in injunction while a criminal investigation is still going. Some of the cases we brought so far estop a scam selling ozone gas as a treatment, unregistered pesticides, Colloidal Silver and other treatments that were sold and marketed as either jurors for cures for or measures for i want to chime in. Is this a china problem or other jurisdiction that we have an equally, a similar threat in terms of counterfeit products . The caseses i was referring o our domestic cases but ill defer to mr. Carpenito on ppe. Once again i can tell you what we see trend wise. What we see trend wise is we have numerous investigations and wheezing trends that there is the importation of materials that are either counterfeit, misbranded or just completely fraudulent. Those were the three bucket. Primarily from china . We have one publicly available prosecution that i can talk about where we have filed a criminal case against a Chinese Company that we believe intentionally sent fraudulent letters. And the Chinese Company as a government owned enterprise . I believe thats the case in china. I want to move on to Something Else and keep to my time. I the Committee Markup iy have o runn to, but mr. Shivers, right . I wantt to make sure you got tht right. I butcher names repeatedly year. First off i to thank you for the work and i did get to listen to your testimony in my office, but can you tell me about other things . I was talked about some of the test gets and other things. Can youou see any patterns specifically from foreign jurisdictions . We talked about Domestic Production but foreign jurisdictions we should be focused on a potentially create consequences coming out of legislation from the senate . Are our investigations are nt focus on importation. We are primarily looking for porting and price gouging. Through the course of investigation wein may discover that the ppe we seized at these, is either substandard or counterfeit so we would address it after that. We work with not just our federal partners but state and local partners to develop of those investigations, and so again what we have seen a some of the ppe that we seized has been counterfeit. I want to keep close to time. This is just a request. You dont have respond to it by want to thank senator blumenthal, senator sass the joint letteroi to be fbi and csa to give us a briefing on hacking. I dont know if you seem that letter but i think it would be very helpful for us to figure out take with chinese pileated hackers some of the threats we have that may be, mr. Chairman, something we can do as committee but if not i know there are a number of senators would like to get together and get a briefing off the committeet and the threats be updated on. We can coordinate that. Sooner rather than later id like to the fbi and csi to be represented at that meeting. Thank you. Senator whitehouse. Thank you, chairman. Somebody could child on my volume there we go, thats more like it. Want to ask about Unemployment Insurance. Before i do i have to react to mr. Hughes, your statement about your policy for answering letters. I dont know what is going on over at the department, but i detect a policy of not answering questions for the record from this committee and not answering letters from this committee. When we had mr. Rosenstein down in the hot seat a few days ago, i pointed out that in 17, i think it was, hearings with department of justice witnesses, not one question for the record from a senator was answered afterwards. Not one. Thats not a coincidence. Thats a policy. When we get question for the record answered its because its a nomination hearing, ast the nominee doesnt go forward until the qfrs are answered. Outside of that, the policy seems to be we the department of justice dont answer Committee Questions for the record. I have a similar problem with letters, so dont believe what you said about there being a responsible policy for getting letters answered. We have letter after letter after letter to doj and fbi fed upon completing unanswered. We finally got a letter out of the antitrust Division Recently by putting a hold on a piece of legislation that the antitrust division wanted, and the answer we got from the antitrust division was a blowoff. It was a nonsense answer. It did not answer the actual questions. I would ask you to take back to the department what the heck is going on . Because this exceeds the partisanship that i see out of the department. This is a persistent failure of response to oversight, and it is not always going to be a Republican Attorney general. Its going be, its not always been a be a republican chairman. Something is wrong. There is a policy someplace about not answering qfrs and not answering letters. And im sick to death of it. So please take that back. And i see the chairman nodding his head so this is a bipartisan concern. The letter that i was raised was some chairman grassley. This is a bipartisan concern. This is not the time to get into this. Into thisg to get further, but somewhere there is a policy and i want it rooted out. Because p it is a wrong policy. On Unemployment Insurance, mr. Shivers come in your testimony, in the headings of the different elements of your testimony given even mention Unemployment Insurance. Its not one of the topic areas. Mr. Dambrosio mentioned briefly Unemployment Insurance in his testimony but described as just simple fraud. I dont know that that is accurate, gentlemen. Just in rhode island we have had 3000 fraudulent Unemployment Insurance applications. Our u. S. Attorney is look into it after the Rhode Island State Police begin an investigation because they seem too be coordinated. The damages could be in the billions. Ff to be in the billions of dollars. Ip information links entities to common fraudulent claims, and also to fraudulent common claims in the o state of massachusetts, in the state of connecticut, in the state of washington. I think you need to step back and take a look at this as a very sophisticated scheme, very likely a foreign led common scheme, and take a much harder look at this Unemployment Insurance fraud then you are, appeared to be undertaken from your testimony here today. I think we are dealing with what may prove to be the crime of the decade, if not the crime of the century, in terms of the amount of money that was stolen through a common scheme, run very likely by foreign crux. Crooks. I would ask you to take the message back that would be really helpful if the department of justice and the fbi would support the bill the treasury supports that former chairman grassley and chairman graham support. That will peel back the ability of foreign entities to hide behind shell corporations in america. Because what happens, as i think you know, is that they steal billions of dollars through these schemes and then they launder the proceeds through shell corporations. We have seen over and over and over again, the department, fbi, secret service have all testified about the role of american shell corporations in hiding criminal assets. And when you look at the extent of the theft from our states through this Unemployment Insurance problem into which federal money was poured into abundance as part of the colored response, i think its a better bet covid response. Those proceeds of theft and up behind shell e corporations whee its harder for you to root them out and run them down. So i would be eager in response to the point about Unemployment Insurance, and what youre planning to do to ramp up your response to the. Senator, there was no ill intent in not mentioning Unemployment Insurance its on. Pull a closer. There was no ill intent in not mentioning the Unemployment Insurance just with a limited amount of time i wanted to give an overview of some but heres the question thats got my interest now. 3000, thats a lot. Thats just rhode island. Connecticut, washington, a dozen states probably more. The question is is there organized effort in the country outside the country to exploit this t program versus just a handful of people misidentifying themselves . I think thats the question. What do you see from the secret Service Point of view . Senator, first, just to your first comment where you said its a simple fraud. That really referred to the tactics and the techniques as opposed to the scope of this particular investigation. I can assure you the secret service is look at unemployment fraud asme a massive amount of fraud. We do see it as an organized group. We do see connections when it comes too transnational criminal activity overseas. You shouldve said that. There you go. That feels better, thank you. Now lets make sure these agencies respond according to that and not to not mentioning it or colligan just like simple fraud. Because it was potentially billions of dollars in fraud. Senator hawley. Thank you, mr. Chairman. And i would also be interested in foror the responses to the questions and i will come back to the actual injustice secondperiod like the start about asking the recent controversy involving 37 planned parenthood offices applying for and receiving funds under the paycheck Protection Program despite their ineligible. Just a quick review of the fact. The cares actte state are eligie for the program only if they and their affiliate organizations have no more than 500 employees. Planned parenthoodd has 16,000 employees nationwide which is 37 times the threshold, and theres no doubt that each of the 37 planned parenthood offices who apply for the funds know that they were affiliated because their own documents claim that they are affiliated. Planned parenthood most recent Financial Statement describes it as one National Branch with 55 5 planned parenthood affiliates, 110 ancillary entities that are, quoting, controlled by those planned parenthood affiliates, end quote. Despite knowing all this, 377 planned parenthood entities applied for and received and, therefore, diverted 80 million from actual Small Business during this Global Pandemic. Let mees ask you, mr. Hughes, im not going to ask you to comment or reveal any details of any Ongoing Investigation but let me ask you generally, if an organization that knows it is ineligible for program nonetheless applies, falsely certifies its eligibility and receives tens of mates of dollars in taxpayer money meant for somebody else, do we have a criminal conduct issue . Thank you for your question. And again, t youre right. Im unable to talk with specific investigations or the existence of specific investigations. However, the way the department is approaching these cases is the application for these loans is pretty simple. In fact, the part you fellow is literally just two pages. There are a number of representations that you fill out the number of employees to have in your Monthly Average payroll, and the nature of your business and then there are couple of certifications such as criminal charges and convictions over the last five years i believe thats the time period. Theres some other information on there, but those inputs were specifically designed to be objective measures that could be quickly looked at and scrutinized for the purposes of determining whether an applicant intentionally misrepresented something material about their business that would allow us to proceed with charging and prosecuting swiftly. We go over the facts and the law, command us to go in each of our investigations and so this is just an area that, like Unemployment Benefits programs, we are focusing, the departments Law Enforcement and prosecutorial resources. So the application is designed to be simple, designed to be very factual . Its not supposed be a matter of interpretation. Do you comply or not comply. Here are the standards. Tell us what the facts are. Do you meet the threshold or not, do i have that right. Was generally, and it is not an application which receives a lot, it needs to receive a lot of Due Diligence from the lender from the beginning. Again, all the misrepresentation, the burden of that is on the applicant. What about executive of the organization or other decisionmakers who may have known about or signed off on an fraudulent organization . Are not talking about any particular investigation to confirm or deny its existence, but in general if you have an organization we have top executives who signed off on this, would to be potential for them . I think the traditional legal standards that apply to corporate liability and individual liability for corporate actions apply with equal force with respect toio prosecutions of this program. Very good. Thanks for that. Look forward to seeing progress of your inquiries over time. Let it come back to the unemployment question senator whitehouse was asking about. Mr. Hughes or mr. Dambrosio. Give any sense of how much money has been lost through fraud in the Unemployment Insurance . Has doj had any success in recovering in of h those funds o date . Senator, i have a specific amount of what has been lost. I couldam tell you i spoke previously, anecdotally from some the Financial Institutions that were working with about 100 of them, weve been told in an alert we put up midmay prevented over about 500 million on alone. That gives you a sense of the particular school. We have been successful in recovering some money. You have been . We have been. We returned approximately through an investigation about 30 million to the state commission. There are cases where this has been can we see some excess state of michigan. Tl we will continue to work diligently on these cases. One, to identify, connect, to recover the front and then prosecute. Does anybody else have anything to add to that . Senator, the only thing i would add is this is a big and growing focus for the department. We are coordinating the u. S. Attorneys office, the us attorneys in other jurisdictions including washington. We are coordinating close with both the secret service, fbi d other Law Enforcement. We are also coordinating with financial industry as the naassistant director noted. Some of the quickest, the quickest tool is to get the Financial Institutions where these payments, the rails the to which these payments travel to identifyym this activity and to work with us and state authorities to stop these payments, especially when theyre traveling overseas. By time as expired. Ive got additional questions which ill submit for the record. Thank you all for your service and being here. Thank you, mr. Chairman. Mq. Senator klobuchar. Thank you very much, mr. Chairman. Active only this important hearing. I think what we do know on this pandemic is that this has brought out the best in so many people, that put themselves on the front line but also was brought out the worst in terms of the kind of scams we are talking about today. Senator grassley has already mentioned a letter he and i lead back in april, april 7, and we are still, mr. Carpenito, waiting for an answer to that. If you could, thats a long time, convey that. All just ask some of the questions because we are concerned about whats happening and what investigations have actually been opened, how many investigations have the task force open . With regards to porting and price gouging weve opened several hundred investigations that are ongoing. And has the task force brought charges against and how many cases . With regards to price gouging the task force is filed eight criminal cases. Okay. Are there 100 100 lawyers assi, is that right . The way the task force is structured is i lead the task force with the assistance of mr. We have three regional coordinators, one for the west out of the alley Attorneys Office, one in the center out of the chicago u. S. Attorneys office and one for the east out of my office. Each u. S. Attorneys office has one representative at least as obviously as some dishes are busier than others there are additional lawyers working on it. Each of thend Department Components also has a representative. Okay. Are they fulltime, the 100 lawyers . I would not say that fulltime. Some of them are. For example, in the speedy thats okay. Ive a lot of other questions. If we cut this back and right we could figure out, again where just kind of push for some actual results. Another way to do this in addition to what youre doing, state attorneys general are doing a lot, attorney general allison and i doesnt want to get on this since the pandemic started, and are you Court Meeting with them on the price gouging . We have encouraged all of the members of the task force in each 93 as Attorneys Office and come at us to court date. I can tell you personally in new jersey we have a very good working relationship the state attorney general. We have formed a joint task force with the state attorney general. I know other districts have done that as well. Weve had virtual daily contact about referrals, and weve worked on cases and w decided which cases fit more with that states purview or the federal government. Your testimony indicated the department focuses on substantially higher prices than traditional Market Participants. I have built i introduced and cosponsoring a bill senator blumenthalha and others and it would prohibit price gouging during National Emergencies and targets price increases of more than 20 above the preemergency services. States with these kind of price gouging laws have targets of ten to 25 . Is there a set them outdoors or minimum amount youre looking at or a target price by the task force and would be helpful to have this a federal law . I think would be helpful to have that federal law as well as mr. Hughes you made my day. Sorry . That made my day, thanks. I think is measured use said, sentencing enhancement for those who try to take advantage of the situations like this, natural disasters be very useful tool. With regards to threshold, i think the target range of talk about is a target range that were talking about. The state attorney generals, the practices i looked at, the state price schedules and tends to 20 range. We are looking for markups of that amount or greater in our investigations. Okay. Last, mr. Hughes come in your written testimony he make it the antitrust division joint statement with the ftc on monitoring employer solution during this pandemic. I focus on the Ranking Member on the antitrust subcommittee with senator lee and i am really concerned about whats going on, like to propose uber grubhub merger which has been some discussion about, i should say. The fact we are seeing more and more consolidation during the pandemic, and on may 1 i sent a letter to the antitrust division and the ftc is a number of other senatorse emphasizing the need for bigger antitrust enforcement. The letter included a number of questions and we received a response but we havent received anything from the antitrust division. Given the importance of this issue, when can we expect a response . It is making sure that we make it a major, major piece of our consumer work right now because its easy just to turn an eye with the Major Companies saying, hey, lets merge, times are tough when in fact whats happening is that theyre squeezing out smaller and Smaller Companies and were going to have less competition, which is why we have the antitrust laws to begin with. The last thing ill ask this on the record so i know my time is expired and ill ask it later about the bill that we just did on protecting seniors from scams. And we also know that a lot of seniors are targeted and i will ask that later. So, thank you. Thank you, senator klobuchar. Senator blackburn. Thank you, mr. Chairman and i want to thank our witnesses for being there today. One of the first cases, pardon me, having to do with price gouging was two brothers outside of chattanooga and they were buying hand sanitizers and running up the price online from 8 to 70 per container. If you would, talk to me about your participation with local and state officials and how you work with them . And i think mr. Shiver this is probably best to you and if you all will talk a little bit how you work with your state and local Law Enforcement partners. So one of the fbis strengths is working with our federal, state and local partners and obviously, working with in the covid19 environment has been very challenging, but that has not deterred our ability to coordinate with our state and local partners. There are a number of ways and i think one of the previous questions, how does the fbi receive information relative to the broad schemes. Theres a wide range, but through our state and local partners, were receiving information relative to covid19 fraud. So because we operate in a task force environments, a lot of our task forces have pivoted to address the covid19 fraud schemes that were seeing. Again, for us, its just a continual practice of working very closely with our state and local partners and addressing whatever crimes are being committed within their jurisdictions. All right. That sound great. And then when youre working with tech and trying to get the Information Online for fraud, which is some of these companies and primarily dealing with china and the fraudulent and inferior merchandise and ppe that was coming out of there, how are you working without some of our allies in this virtual space in order to get this information to shut these entities down and does big tech respond quickly to your request to shut down some of the entities and then to block them off their server system . So as previously mentioned, our focus is not the importation of the ppe. Were primarily dealing with ppe on the front end through price gouging. We come across ppe that is sub par or counterfeit. There are a number of fraud schemes weve talked about and some of those are internetbased. As appropriate we work with our International Partners to develop information leads that may have an access to the United States or disseminate to our International Partners. The International Partnership is important in dealing with covid19 because a lot of these fraud schemes are emanated from across the world. We have a relationship with various entities in the private sector i spoke a few minutes earlier with the Banking Industry and we spoke with the Tech Industry and obviously that requires Legal Service in order to receive information that may be relevant to our investigation. Thank you. Yield back. Thank you, mr. Chairman. Thank you. Senator blumenthal. Thanks, mr. Chairman. Id like to ask our two Justice Department representatives, have you are you familiar with project air bridge . Yes, sir, im familiar with the fact that project air bridge exists. A number of us, senator warren and i, began an investigation some time ago asking questions of the six major distributors involved in project air bridge and our inquiry has shown that there was cronyism and political favortism that led to tragically misallocated supplies and government seizure of equipment that were going to providers that very much needed it, cronyism and incompetence that was exemplified in this program had real life consequences and clearly this project air bridge, which was a kind of pet project of jared kushner, was in effect a bridge to nowhere for the Health Care Providers that needed that equipment. At the very least, there was incompetence, confusion, and even possible corruption. Is there any ongoing inquiry within the department of justice related to project air bridge . Unfortunately, senator, im not at liberty to discuss any ongoing nonpublic investigations of the department. Will you commit to reviewing this inquiry and making it part of your investigation if there is one underway . Unfortunately, senator, doing that would be acknowledging the existence of an investigation and im just not at liberty to discuss investigations of the department. Well, youll at least read the results of our investigation, correct . I once again, sir, i mean, i would be remiss to comment about an investigation, what i can tell you were committed to rooting out fraud in relation to any of the cares act programs and anything related to covid19, hoarding and price gouging. Senator schumer and senator warren and i will send you the results of this investigation and hope youll follow up on it. Let me ask you about the fake cures, which are part of that, i think, 48 billion total number that senator feinstein mentioned, which is an astonishing and appalling number. If americans lost close to 50 billion, we need really aggressive and proactive Law Enforcement in this area. I know you said that you have enough resources and authority, but i think americans are going to be looking for results at some point. So, i would suggest that maybe you would want to review whether in fact you do have enough authority and resources because there cant be too much when youre investigating this kind of fraud that direct impacts people. In a recent report the centers for science and Public Interest found that at least 49 Dietary Supplements on amazon with antiviral claims were making false and misleading statements. Do you have any such fake cures under investigation . Would yield to mr. Hughes. So, senator, we have several investigations that relate to misbranded or mismarketed pharmaceuticals. Have you brought any action . We have and we have brought a number of injunctions to stop the marketing of such conduct. We have filed criminal complaints against the individuals who have been marketing. Could you provide the details to my office, please . Let me move on because my time is limited. In terms of Unemployment Insurance you were answering some questions posed by senator white house. What exactly is the modis modis operandi of these scams and have you found any scams in connecticut . Senator as weve seen, primarily is the scam itself, is acquiring pii stolen pii purchased on the black market or through Network Intrusions and being utilized, using that information and applying to the different states for the Unemployment Insurance. Yes, we are finding violations and were pursuing those cases. How close are you to bringing action . I dont have the specific information as to how close we are to prosecution. Do you have a dollar amount in terms of what the impact is . I have previously, senator, is that weve published alert in mid may in working with the Financial Institutions, because the Financial Institutions are the natural choke point for these payments to go. They were able to prevent, according to them, over 500 million in payments. Weve also been able to recover and return to the state of michigan about 30 million of fraudulent payments that were made. You have suspects, specific individuals . I dont personally have that information. I know we have active investigations. When i say you, i dont mean you personally, i mean your agency. I would of to go back and get specific information. Could you provide more details to my office later today . Im out of time right now and do need more information from your agency so i would appreciate Additional Information later today. Well provide what we can in Ongoing Investigations. Thank you, sir. Thank you, senator hirono. Thank you, mr. Chair. I was interested in the line of questioning from mr. Durbin. You indicated you are now getting cooperation from amazon, facebook and ebay about the selling of stolen items so have there been any prosecutions based on the information that you have gotten from the cooperation from these three entities . I dont have any specifics about any investigations in front of me. What i could tell you is that we have done outreach with those outlets and that i am unaware of any situation where we have sought information and have obtained it pursuant to legal process. Well, apparently according to the way the situation was described by senator durbin, that this goes on in quite a blatant way and if we can get information from the entities that are platforms for the sale of the stolen goods, that would be a good thing. And so, i would suggest that you look at the informed consumer act that senator durbin referred to, which is bipartisan, supported by senators durbin, cassidy, and that could give you more tools to go after crimes. And hundreds of prosecutions and thousands of investigations as a result of the scam that fraud perpetrated because of the opportunity presented by covid19 and i think that you indicated that there are serious consequences for people who commit these kinds of criminal acts. So id like to know, has anybody gone to prison . Are you seeking prison time . What kind of fines are you imposing on the people that you prosecute for these crimes . Thank you for the question, senator. I think for the fraud, the standard penalty, the incarceration length applies that normally applies under noncovid related circumstances, with respect to some of the ppp fraud, for example, again a lot of factors need to be need to necessarily affect how long a particular defendants prison time would be. And whether they plead and take responsibility or are convicted at trial also affects it as does the sentencing judge. Back of the envelope calculation just for ppp would be, anywhere the average would be between 50 months and 100 months and that is, you know, typical for the types of frauds were seeing where the proceeds are in the millions of dollars. And again, there are a number of different tools we bring to bear to address these problems and disrupt these i am running out of time, but, do you think that we should create a higher consequences or steeper consequences for people who take advantage during a National Crisis and a pandemic . Are you referring to the usual fraud and consequences, but maybe we should be looking at, you know, higher levels of consequences. What do you think . Senator, i think there is an honest and important debate as to the level of consequences for offenses during a national imagine. There have been discussions about proposed legislation or sentencing guidelines, those discussions in the departments view should continue and wed be willing to have discussions about other proposed legislation in that vain. Youve been asked about the scam involving a nigerian entity. So apparently a number of these kinds of frauds are perpetrated by foreign entities and im wondering how easy is it for you to effectively prosecute foreign entities . And do you need more tools, any of you, to go after the foreign criminals . I think from a prosecution standpoint ill defer to our Law Enforcement investigative colleagues with respect to investigations. From a prosecution perspective we have a number of tools, jurisdictional hooks which permit federal prosecutors to charge and effectively prosecute foreign criminal organizations, and those tools in many respects are as robust as they can, given certain jurisdictional and constitutional limitations and ill deter to my colleagues for the investigations of these. So as i mentioned previously, working with International Partners is very important for us. And so, whether these fraud schemes emanate from a foreign country that touch our american citizens, we work very closely through our legal attache partners and working with our Law Enforcement partners. One of the potential obstacles we face are matters of extradition. Those are things we have to work through. Again these fraud schemes because many are internet based have a foreign nexus. With the fbi one of the things weve done, this is through our elder fraud initiative, we have worked with the department of justice the last few years, we have assigned legal attache where we know some of that emanates and that gives us connection with our partners and enhances our ability to bring those to justice. Just have one more question, followup, mr. Chairman . Thank you very much, senator h hirono, well make sure that you get to do that. Thank you. Okay. Senator booker. I think senator hirono said she want today ask one more last. Im sorry, i misheard. Senator hirono. Im sorry. Ask anything you want to ask, i apologize. I think its possible to prosecute these types of crime when the perpetrators are foreigners and theres a our panel explained the difficulties that some of that information thats already out there personally identifiable information, so, is there something more that individuals can do to protect themselves from the sort of fraud that comes about from stolen identity . Good question. I would say just kind of a basic 101. There are a number of services where individuals can have access to their Credit Report and i would imagine that reviewing your Credit Report for anything that may not, you know, you may not have knowledge of would be important, but also, i think also taking preventive measures and that is, obviously, the internet, theres a way that, you know, the criminals approach individuals sending these unsolicited emails so i would say just using, for lack of a better word, basic common sense in how the public deals with some of these opportunities that these criminal organizations take advantage of. So, its obviously a very difficult thing, but again, unsolicited emails, unsolicited phone calls where individuals are actually providing some of the pii, but again, as we talked about some of that pi may be stolen, but i would say just using some basic preventive measures. Thank you, mr. Chair. Thank you. Senator booker. Mr. Chairman, i think the rules of the committee its better to ask for forgiveness than permission. I know senator hirono knows that rule, but im grateful to be here and if i can, i want to direct my questions to mr. Ca mr. Carpnido not just because hes from new jersey or bald or said generous things about him, but obviously these things are obviously impacting our state and i would love to get some of his insights. So, first of all, weve seen numerous instances of retailers taking advantage of the Global Pandemic and gouging, charging outrageous fees for medical supplies, personal protective equipment, things that are really we deem essential and are critical to the life, safety, wellbeing of so many of our First Responders and others. This behavior is immoral, flankly, and reprehensible. My team and i have introduced and the prevent and profiteering act on may 7th. Theres no federal law go ens this kind of reprehensible price gouging on these that are deemed essential to the safety and lives of americans. So, im curious what you think of the power of having a federal law against this kind of gouging, if you can comment on that, and then talk about the prevalence of this in new jersey and how have you, without that law been successful to try and combat these issues. Thank you, senator, so i agree with your characterization, i think that new jersey is one of the states that had one of the largest impacts from this type of conduct because as everyone knows in new york, new jersey, were two of the most impacted states in the country by covid19. We also have some of the most vulnerable victims for this, as we have a very large Elderly Population and we have a large health system. Thanks to the production act and the swift above by attorney general barr to set up a task force to enforce the act, weve had the tools for the hoarding and discovery of materials. And by the department of health and human services. Thats how were able to operate. I have not felt constrained. But as you mention, there is a history and a record here of folks trying to take advantage of National Disasters like this. We saw it in katrina. You and i saw it in new jersey after Hurricane Sandy and weve seen it throughout the country on a scale that weve seen never before with covid19 because its the Largest Health crisis since the spanish flu. We have been unable to address certain types of price gouging because theres not a federal statute. For example, things like toilet paper. Things like, you know, meat, things like food. Things like other materials that personal consumers need are better suited under the current statutory scheme to be prosecuted by state Attorney Generals Office. What weve done, ive worked with mr. Hughes, mr. Shivers, and we make those referral to state agencies where we think we have the tools to prosecute the individuals. The most important thing is making sure theyre brought to justice, not who does it. Im grateful for that response and i really do believe theres an urgency to get on the federal level more tools to deal with that. You know, on march 20th of this year, you announced the state federal covid19 task force with attorney general and our comptroller walsh. The task force bridges the prosecutorial efforts of the state and federal agencies in a kind of coordination and cooperation i think is really needed in circumstances like this and so i just want to hear a little bit more about the federal, state task force. What kind of fraud schemes you guys have uncovered since its creation and what challenges have you all encountered in combatting that fraud that you see out there . Sure. And you know, were very blessed in new jersey. I cant speak about every state, but i think that weve heard, as Task Force Leaders myself and mr. Hughes, have heard similar Success Stories throughout the country in forming partnerships here. We have had had a very Good Relationship during my entire tenure with Attorney Generals Office and First Assistant davenport and brock. Theyve been in almost Constant Contact with regard to referrals. I cannot get into specifics of referrals because the cases i have on my mind are not ones that are publicly available information at this time. What i can tell you, we havent seen a lot of hurdles because weve put egos aside and focused on making sure the cases are brought. With regard to the tools, like i said, the defense production act has been a powerful tool for us and its given us the, you know, the authority to investigate price gouging and do so pretty vociferously and quickly. Im over time. Im going to submit more of our pressing questions for the record. And qfrs. Ive got one last question to put you on the spot and i apologize for doing this in advance. My question is Anthony Ambrose, is he a great Police Director or is he the greatest Police Director . Hes a national treasure. Ive been saying this since i came in to office and weve seen it during these riots. The fact that newark stayed together as a community and were peaceful in their reaction to the death of george floyd is a credit to director ambrose for his handling of Law Enforcement, and a credit to the mayor for his Community Engagement and i saw firsthand for the past eight to ten days as other cities struggled with these protests, newark thrived and theyre doing so because of the work that was done through the newark concept decree, with the leadership of Anthony Ambrose and as i said, the Community Engagement and the support that the mayor issued enforced with the Police Department and both have shown to me since ive been u. S. Attorney and focusing on Violent Crime throughout newark not just through prosecutions, but through education and Community Engagement. Well, i appreciate your deference to consent decrees, i wish the attorney general would use them, they were a constructive force in the city of newark and i appreciate you saying things about the leadership, and baracka and thats true and Anthony Ambrose takes better care of the city of newark than himself and again i say this on the record, encourage him to get out there and exercise and be more healthy so we have him a few nor decades. s down 70 pounds, looking good. He is. Thank you, mr. Chairman. Thank you. Ill have to call him, trying to lose some weight myself. Here is the deal, we all appreciate you coming to the committee and i ask you, do you have the tools necessary, the resources, seems like theres some tools that maybe we could utilize that you dont have so if you could kind of get your collective wisdom, i think senator durbin had a bill. Senator klobuchar, i think senator booker introduced legislation. So get back with us about what we can do to help you. I mean, what can the committee do to change laws or supplement laws, sentence enhancing, whatever just let us know. Thank you all for being on the front lines and well hold the hearing open for the requisite amount of time for additional questions. Thank you. [inaudible conversations] [inaudible conversations]