New York State Governor Kathy Hochul has signed into law state Senator Zellnor Myrie’s “COVID-19 Fraud Accountability Act”, which increases penalties for white collar crimes committed in connection with COVID-19.
The bill, which was both written and sponsored by Myrie, increases the civil financial penalties for fraudulent white collar crimes, specifically — according to the bill — “fraud in connection with an abnormal disruption of the market.” New York saw an uptick in such crimes during the pandemic, as fraudsters took advantage of vulnerable people in need of healthcare, financial assistance, or even items like masks — and took advantage of public assistance programs meant for those suffering financial hardship because of the pandemic.
“These past few years have been very challenging, not least because of pandemic-related frauds and scams perpetrated on innocent New Yorkers,” Myrie said in a Dec. 28 statement. “Our new law sends a strong message: if you take advantage of people during difficult times, we will take strong civil action against you. I’m very grateful to Governor Hochul for signing this bill, and to my co-sponsor Assemblymember Rozic for getting this bill signed into law.”
According to the Federal Trade Commission, an estimated $80 million has been lost to New Yorkers due to pandemic-related fraud since 2020.
With the new COVID-19 Fraud Accountability Act civil financial penalties for white collar fraud committed in connection with the pandemic will be increased to three times the amount of any unlawful gain or by $25,000, whichever is greater. The increased penalties don’t just apply to crimes committed during or in connection with the COVID-19 pandemic — higher fines will be similarly applied to crimes that arise from any future emergencies and market abnormalities.
“During times of crisis, consumers are at higher risk of being scammed and defrauded,” said Assemblywoman Rozic, Chair of the Assembly Committee on Consumer Protection. “This new law will ensure those who take advantage of New Yorkers at the times they are most vulnerable will be penalized heavily.”
Pandemic-era fraud complaints included a case documented by the New York State Attorney General which saw one COVID-19 testing company offering test result turnaround within 48 hours, but taking twice as long to deliver, and another company claiming a 24-hour turnaround guarantee which actually took more than five days. In another instance, a Brooklyn woman pled guilty to a whole host of schemes — defrauding the COVID-19 Hotel Room Isolation Program, selling fake COVID-19 test results, and illegally taking Payroll Protection Program loans and unemployment benefits.
“In normal times, we should not tolerate scams that target New Yorkers or their wallets. But at a moment when all of us are suffering the effects of this pandemic, we must make extra effort to deter fraud and punish it when it occurs,” Myrie said. “New York consumers should know [the] state government has their backs during this time of vulnerability, and will strongly enforce our laws against individuals and entities who seek to abuse their trust.”