Civil complaint filed in alleged fraud case

The United States filed a civil complaint to recover more than $543,000 from individuals allegedly based in China who purported to sell face masks and N-95 respirators at inflated prices but never shipped the products.

According to court documents, a number of fraudulent websites were established to purportedly sell N-95 respirators and other protective facemasks in February and March of 2020, just as the number of COVID-19 cases were rising in the United States and the demand for this type of equipment was increasing. The websites were a fraud.

“It is unconscionable that anyone would exploit the increased demand for personal protective equipment brought on by the COVID-19 international pandemic,” First Assistant United States Attorney Daniel P. Bubar said. The “complaint demonstrates our Office’s commitment to aggressively pursue those who attempt to defraud individuals and entities during this public health crisis.  I am proud of Coronavirus Fraud Task Force and the way we have worked together across Virginia to hold fraudsters accountable.”

Payments for the masks were made through four separate PayPal accounts, all allegedly associated with telephone numbers and internet protocol addresses based in China.

Law enforcement in the United States became aware of the websites when customers began to notice irregularities with their orders. Some customers simply never received the masks they ordered. Other customers, instead of receiving masks or respirators, received toys or rhinestone necklaces. Victims of the alleged fraud include individuals in the Western District of Virginia, a Florida municipality, and a Wisconsin sheriff’s office. 

“The Virginia Coronavirus Fraud Task Force is committed to identifying and pursuing fraudsters seeking to exploit this pandemic,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “As today’s action shows, we will continue to use all available tools to disrupt overseas criminals who defraud our citizens as they try to protect themselves and their families.” 

The filing will forfeit $205,242 from one account, $128,868 from another, $194,982 from a third, and $13,923 from a fourth account. All of these PayPal accounts were associated with the fraudulent websites. 

“Criminals have taken advantage of the COVID crisis for months to steal money from unsuspecting victims,” said David W. Archey, Special Agent in Charge of the FBI’s Richmond Division. “Investigation by the Virginia Coronavirus Fraud Task Force (VCFTF) identified several fraudulent websites that marketed protective equipment at high mark-up but then never shipped the goods to customers. The forfeiture complaint filed today by the U.S. Attorney will prevent these fraudsters from profiting from the pandemic, as well as provide restitution to their victims. The FBI encourages anyone who suspects fraud or has been victimized to report those events to the FBI’s Internet Crime Complaint Center (www.IC3.gov).”

“The fraud perpetuated by these entities is unacceptable and put countless lives at stake during the height of the COVID-19 pandemic,” said Virginia Secretary of Public Safety and Homeland Security Brian Moran. “I am proud of the fact that our state and federal public safety partners had the foresight to recognize the potential for foreign and domestic entities to prey on Virginians during a worldwide crisis. Due to the quick and effective actions by law enforcement and the U.S. Attorney’s Office, these fraudulent entities will be now held responsible for their harmful, deceptive practices.” 

Bubar thanked the Department of Justice’s COVID-19 Hoarding and Price Gouging Task Force. Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, U.S. Attorney for District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs.

Investigation of the case was conducted by the FBI’s Richmond Division. Assistant U.S. Attorneys Krista

Consiglio Frith and Michael Baudinet are litigating the case.

For more information, contact the Virginia Coronavirus Fraud Task Force, https://www.justice.gov/usao-wdva/covid-19-fraud; Western Virginia Coronavirus Fraud Coordinator, Assistant U.S. Attorney Michael Baudinet, USAVAW.COVID19@usdoj.gov or 540-278-1494; Eastern Virginia Coronavirus Fraud Coordinator, Assistant U.S. Attorney Kaitlin G. Cooke, USAVAE.COVID19@usdoj.gov or 804-819-5416.

To report a COVID-19 fraud scheme or suspicious activity, contact the National Center for Disaster Fraud (NCDF) at justice.gov/disastercomplaintform; the FBI at www.ic3.gov or 804-261-1044. 

To report fraudulent activity to the Virginia State Police, Virginians can contact the Virginia Fusion Center (VFC) at vfc@vfc.vsp.virginia.gov.

For information on the COVID-19 virus and the federal response, visit www.cdc.gov/coronavirus/2019-ncov/index.html