Myrie pandemic fraud bill passes Senate committee

Myrie holds hearing on early voting
Brooklyn Democratic Sen. Zellnor Y. Myrie.

The Senate Committee on Consumer Protection on Wednesday passed new legislation sponsored by Sen. Zellnor Y. Myrie (D-Brooklyn) that would increase civil penalties for white-collar frauds and scams associated with the COVID-19 pandemic.

“New Yorkers have suffered enough throughout this pandemic without having to worry about theft, scams and fraud,” said Sen. Myrie, who represents the 20th Senate District in Central Brooklyn.

“Unfortunately, COVID-19 has brought out many bad corporate actors who try to make a quick buck during this time of tragedy, scarcity and confusion,” added the senator, whose grandmother hailed from Jamaica. “My legislation would sharply increase the fraudsters’ cost of doing business here in New York.”

He said the COVID-19 Fraud Accountability Act (S.4954-B) would sharply increase civil financial penalties for white-collar crime committed in connection with COVID-19, imposing a civil penalty of three times the amount of any unlawful gain (or $25,000, whichever is greater).

The legislation would also increase penalties for white-collar crimes arising from the unique circumstances caused by the COVID-19 pandemic, as well as future emergencies and market abnormalities defined by law.

The New York Department of Financial Services has warned of healthcare enrollment scams, deceptive marketing schemes, phishing and other cyber-crime, product fraud, and foreclosure rescue scams.

According to the Federal Trade Commission, New Yorkers have already lost over $56 million dollars to COVID19-related fraud.

More recently, Myrie noted that New York consumers have reported scams and fraud associated with COVID-19 testing.

He said the New York State attorney general has documented one testing company falsely promising results in 48 hours but taking twice as long to deliver, and another guaranteeing 24-hour results that have taken more than five days.

The attorney general has also documented complaints of $14 or $25 COVID test kits being illegally sold for double or triple that amount.

Myrie said one testing company with several New York City locations is now the subject of a $10 million class-action lawsuit after several New Yorkers received surprise bills for hidden testing fees.

“While all of us are suffering during the effects of this pandemic, we must act to deter fraud and punish it when it occurs,” Myrie said. “By advancing this bill, New York can affirm that it stands firmly on the side of consumers during this time of vulnerability, and that it will take strong civil action against anyone seeking to abuse their trust.”

The measure now moves to the full Senate for consideration. It is being co-sponsored in the Assembly by Assembly Member Nily Rozic, chair of the Consumer Affairs and Protection Committee.

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