The U.S. Department of Justice announced on April 10, 2020 that a 39-year-old Georgia man was arrested and charged in federal court in the District of Columbia on April 10, 2020 with fraud for attempting to sell millions of nonexistent respirator masks to the Department of Veterans Affairs in exchange for large upfront payments.
The criminal complaint charges the man with wire fraud and alleges that he made and caused to be made a series of fraudulent misrepresentations in an attempt to secure orders from the Department of Veterans Affairs for 125 million face masks and other personal protective equipment (PPE) that would have totaled over $750 million. The complaint alleges that the man promised that he could obtain millions of genuine 3M masks from domestic factories when he knew that fulfilling the orders would not be possible. The man also allegedly made similar false representations to other entities in an effort to enter into other fraudulent agreements to sell PPE to state governments.
After his arrest, the man appeared before the Chief United States Magistrate in the United States District Court for the Northern District of Georgia who ordered him detained. He will be extradited to the District of Columbia. If convicted of the wire fraud charge, the man would be subject to a maximum statutory penalty of 20 years in prison and a fine of up to $250,000.
In announcing the arrest and criminal complaint, the U.S. Attorney General stated, “We will vigorously pursue fraudsters who exploit the COVID-19 pandemic to make money. As this case demonstrates, even beyond the typical costs associated with unlawful behavior, COVID-19 scams divert government time and resources and risk preventing front-line responders and consumers from obtaining the equipment they need to combat this pandemic. The Department of Justice will not tolerate this conduct, especially when it involves this kind of egregious attempt to target and defraud our nation’s treasures – our veterans.”
The Inspector General for the Department of Veterans Affairs stated, “We are committed to protecting the integrity of taxpayer funds and ensuring the delivery of medical supplies necessary to provide quality healthcare to our nation’s veterans, and any attempt to exploit the current global COVID-19 pandemic for personal gain will be dealt with swiftly. Today’s charges are the direct result of the expeditious and tireless efforts of special agents of the Department of Veterans Affairs, Office of Inspector General, working in tandem with our law enforcement partners at the Department of Justice and Homeland Security Investigations.”
The FBI warned on March 27, 2020: “Scammers continue to take advantage of the COVID-19 pandemic to steal money through a variety of means. The FBI is warning the health care industry in particular of an increased potential for fraudulent activity dealing with the purchase of COVID-19-related medical equipment. Based on the current stress on the supply chain, scammers may promise equipment they do not have access to in order to capitalize on the medical community’s urgent needs. The FBI asks the medical community to exercise due diligence and appropriate caution when dealing with any vendors with whom they have never worked and/or of which they’ve never heard, and when relying on unidentified third-party brokers in the supply chain.”
If you have information regarding false claims involving COVID-19 having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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