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 SenateOffice 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 BusinessAdministration 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 t