Georgia man tried to sell $317M worth of masks — except, they didn’t exist, feds say
Federal authorities in Georgia have busted a multi-million-dollar scheme to sell 50 million nonexistent N-95 face masks to a foreign government in response to the coronavirus crisis, prosecutors said Thursday.
One of the accused, Georgia resident Paul Penn, faces charges in the alleged scam, according to the U.S. Attorney’s Office for the Southern District of Georgia.
Prosecutors accuse Penn and his associates of trying to defraud an unnamed entity by offering to sell it “50 million 3M Model 1860 Respirator Masks.” His company, Spectrum Global Holdings, LLC, served as the middle man to negotiate a cut of the $317 million price, the U.S. Attorney’s office said in a news release.
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A company with that same name is registered in the Atlanta suburb of Norcross, CNBC reported. However, it never had the masks it was attempting to sell, according to prosecutors.
“Using a worldwide pandemic as an opportunity to take advantage of those searching for badly needed personal protective equipment is reprehensible,” Bobby Christine, U.S. Attorney for the Southern District of Georgia, said in a statement.
As of Friday, May 29, there were more than 1.7 million confirmed coronavirus cases in the U.S. and more than 101,000 deaths, according to Johns Hopkins University.
New COVID-19 cases have steadied in Georgia, where over 45,500 residents have been infected with the highly contagious virus as of Friday, May 29, data from the state’s Department of Public Health show.
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As part of their scheme, Penn and the others negotiated a sales price that was “more than 500 percent higher than the previous normal market value for N-95 masks,” Christine’s office said in a news release. The foreign government was just about to wire the funds, but the U.S. Secret Service intercepted “just before the transaction could be competed,” according to prosecutors.
“Our office, together with our colleagues at the COVID-19 Hoarding and Price Gouging Task Force and our law enforcement partners, will aggressively seek out any fraudsters who exploit this crisis as a way to make a quick buck,” Christine said in a statement.
Penn is accused of criminal attempt and conspiracy “by way of an information,” a formal charge similar to an indictment, according to 11 Alive News, citing authorities.
If convicted, he faces up to 20 years in prison, prosecutors said.
