/>iThe Consumer Protection Branch of the United States Department of Justice (DOJ) is one of the most overlooked and misunderstood parts of the country’s largest law enforcement agency. With a wide field of enforcement, the Branch can pursue civil enforcement actions or even criminal prosecutions against companies based in the United States and even foreign companies doing business in the country.
Here are four things that Dr. Nick Oberheiden, a defense lawyer at Oberheiden P.C., thinks that people and businesses need to know about the DOJ’s Consumer Protection Branch.
The Wide Reach of “Protecting Consumers”
According to the agency itself, the Consumer Protection Branch “leads Department of Justice enforcement efforts to enforce consumer protection laws that protect Americans’ health, safety, economic security, and identity integrity.” While “identity integrity” is relatively tightly confined to issues surrounding identity theft and the unlawful use of personal data and information, “health,” “safety,” and “economic security” are huge and vaguely defined realms of jurisdiction.
Under the Branch’s enforcement focus or interpretation of its law enforcement mandate, it has the power to prosecute fraud and misconduct in the fields of:
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Pharmaceuticals and medical devices
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Food and dietary supplements
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Consumer fraud, including elder fraud and other scams
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Deceptive trade practices
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Telemarketing
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Data privacy
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Veterans fraud
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Consumer product safety and tampering
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Tobacco products
Business owners and executives are often surprised to learn that the Consumer Protection Branch has so many oversight powers. But the Consumer Protection Branch’s wide reach is not limited to the laws that it can invoke and enforce; it also has a wide geographical reach, as well. In order to carry out its objective, the Branch brings both criminal and affirmative civil enforcement cases throughout the country. In one recent case, the Consumer Protection Branch prosecuted a drug manufacturer for violations of the federal Food, Drug, and Cosmetic Act (FDCA) after the drug maker hid and destroyed records before an inspection by the U.S. Food and Drug Administration (FDA). The drug manufacturer, however, was an Indian company that sold several cancer drugs in the U.S. The plant inspection took place in West Bengal, India.
The Branch Has Lots of Laws at Its Disposal
The extremely broad reach of the Consumer Protection Branch comes with a significant implication: There are numerous laws that the Branch can invoke as it regulates and investigates businesses. Many of these are substantive laws that prohibit certain types of conduct, like:
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Food, Drug, and Cosmetic Act (FDCA)
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Identify theft and fraud (18 U.S.C. § 1028) and aggravated identity theft (18 U.S.C. § 1028A)
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Bank fraud (18 U.S.C. § 1344)
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Healthcare fraud (18 U.S.C. § 1347)
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Anti-Kickback Statute (42 U.S.C. § 1320a-7b)
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Physician Self-Referral Law (42 U.S.C. § 1395nn)
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False Claims Act (31 U.S.C. § 3729 – 3733)
Others, however, are procedural laws, which prohibit using certain means to carry out a crime, like:
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Mail fraud (18 U.S.C. § 1341), which is the crime of using the mail system to commit fraud
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Wire fraud (18 U.S.C. § 1343), which is the crime of using wire, radio, or television communication devices to commit fraud, including the internet
This can mean that many defendants get hit with multiple criminal charges for the same line of conduct, drastically increasing the severity of a criminal case. For example, in one case, a group of pharmacists fraudulently billed insurers for over $900 million in medications that they knew were not issued under a valid doctor-patient relationship. They were charged with misbranding medication and healthcare fraud, in addition to numerous counts of mail fraud for shipping that medication through the mail.
The Branch Has the Power to Pursue Civil and Criminal Sanctions
Lots of business owners and executives are also unaware of the fact that the DOJ’s Consumer Protection Branch has the power to pursue both civil and criminal cases if the law being enforced allows for it.
This has serious consequences for companies, and not just because the Branch can imprison individuals for putting consumers at risk: It also complicates the strategy for defending against enforcement action.
A good example of how this works in real life is a healthcare fraud allegation that is pursued by the Consumer Protection Branch under the False Claims Act, or FCA, because the alleged fraud implicated money from a government healthcare program, like Medicare or Medicaid. For it to be the crime of healthcare fraud, the Consumer Protection Branch would have to prove that there was an intent to defraud the program. If there is no intent, though, the Branch can still pursue civil penalties.
This complicates the defense strategy because keeping prosecutors from establishing your intent is not the end of the case. It just takes prison time off the table. While this is a big step in protecting your rights and interests, it still leaves you and your company open to civil liability. That liability can be quite substantial, as many anti-fraud laws – including the FCA – impose civil penalties on each violation and impose treble damages, or three times the amount fraudulently obtained.
As Dr. Nick Oberheiden, a consumer protection defense lawyer at the national law firm Oberheiden P.C., explains, “While relying on a lack of intent defense can work with other criminal offenses, it is a poor choice when fighting against allegations of fraud because it tacitly admits to the fraudulent actions. Enforcement agencies like the DOJ’s Consumer Protection Branch can then easily impose civil liability against your company.”
The Branch Works in Tandem With Other Agencies
The Consumer Protection Branch only has about 200 prosecutors, support professionals, embedded law enforcement agents, and investigators. However, between October 2020 and December 2021, the Branch charged at least 96 individuals and corporations with criminal offenses and another 112 with civil enforcement actions, collecting $6.38 billion in judgments and resolutions.
The Branch can do this in large part because it works closely with other federal law enforcement agencies, like the:
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Food and Drug Administration (FDA)
By pooling their resources with other agencies like these, the DOJ’s Consumer Protection Branch can bring more weight to its enforcement action against your company.
