El Justice Department dismantled a billionaire fraud scheme that the pandemic used COVID-19 for their illicit purposes.
By MiamiDiario Newsroom
A Georgia man was arrested Friday for trying to defraud the Department of Veterans Affairs with millions of dollars, in one of the first big fraud cases related to the coronavirus, presented by the new COVID-19 Hoarding and Price Throttling working group of the Department of Justice, reports CBS.
Christopher Paris allegedly told veterans that he had 125 million 3M masks and that would sell for $6,45 each. In fact, the equipment for sale did not exist, and the exchange would have added more than 750 million dollars. 3M's lawyers say these masks they sell for $.60 to $1.20 each.
According to the Justice Department affidavit supporting the lawsuit, P9arris is accused of exploiting the COVID-1 pandemic and trying to "get large up-front payments for scarce PPE that Parris knows she can't fully source or deliver."
“We are still investigating,” a Justice Department official told CBS News. “But we have been able to show, as the complaint states, that requests, significant requests of…several million dollars were made by entities to the defendants. And there were attempts that we know to date of earn money for representations that we allege are fraudulent, which were from hundreds of millions of dollars."
On March 24, the Attorney General William Barr announced the creation of the task force, ordering it to coordinate the investigation and prosecution of those illicit activities and to work on the development of law enforcement measures. The United States Attorney General of New Jersey, Craig Carpenitoleads the working group.
"This is just an example of the department's commitment to handle such a sensitive and high-priority matter so quickly, and to do so in multiple jurisdictions and agencies, and I don't think it could have been any easier," a Justice Department official said.
The fraud
According to the report of CBS News The complaint alleges that the security forces were informed of Parris's plan at the end of March, while the VA inspector general's office was investigating "Company A," a Louisiana-based company which claimed to sell industrial safety supplies.
"Person B," a company agent, offered an undercover agent 3M 8210 and 1860 respirator masks at the price of $7,13 per mask, with a minimum purchase of 1 million masks. The masks, the individual said, would be made in California and Illinois plants. But 3M hasn't converted those facilities to make masks. Person B identified Parris and his company, EncoreHealth, as one of company A's suppliers.
In another transaction attempt, Person B also spoke with a undercover Homeland Security officer purporting to be a procurement officer for the state of Louisiana, and offered to sell Louisiana large quantities of 3M N95 masks, isolation gowns and Tyvek suits, all of them difficult to obtain during the coronavirus crisis. Person B offered a quote of $7,25 for each 3M mask.
At the same time, the Office of Homeland Security and Emergency Preparedness of the Governor of Louisiana (GOHSEP) hizo orders for more than 7 million dollars to Company A. However, Louisiana has so far only received a few 40.000 chemical suits, which cost the state $794.000. Person B later said that Parris and Encore Health they were going to supply the PPE for the Louisiana contract.
"The 160.000 units of masks of the model 1860 of the 3M brand they have not arrived“says the complaint. "In other words, the State of Louisiana expected to be in possession of 160.000 masks for its emergency response efforts which it does not have."
On April 1, after receiving a referral from Person B, Parris called the undercover agent in Louisiana, who he believed to be a VA procurement employee in Washington, DC Parris claimed to be able to obtain PPE, like ventilators, masks and other items on the list of scarce materials, from companies like 3M in a week or two.
The next day, after a request from the undercover agent, Parris called him and said he "had a freak incident" — he had a shipment of 3M-brand, model 1860 masks "on the floor."
Parris told the undercover agent that the larger orders would be "easier to obtain", and that he could sell masks for $6 or $6.50. In these conversations, Parris told the agent that he would need Louisiana to commit to a purchase of 25 million masks to "trigger the process" and that Encore Health Group, "constantly does nine-figure deals."
But the 3M lawyers "cast doubt" representations Parris made to the VA, and said in the complaint that Encore Health is not a 3M partner, and simply it's not possible for 'nobody' to get five million masks 3M respirator in the current climate of the COVID-19 pandemic.”
California was also almost let down by Parris. According to the complaint, Parris tried to sell the state more than $40 million worth of PPE but California ultimately called off his purchase when it suspected fraud.
Recidivist
aim CBS Newsthat Paris, was previously arrested in January on federal charges stemming from a Ponzi scheme a decade long in which supposedly swindled investors out of $115 million. Today, the Western District of New York revoked Parris' bail to ensure he would be held pending action in both cases.
He will be extradited from Atlanta to the District of Columbia., where he faces a sentence of up to 20 years in prison and a $250.000 fine if he is found guilty.
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