Two Texas men have been charged with conspiracy to commit and committing wire fraud during the COVID-19 pandemic involving medical-grade nitrile gloves. The two men were both charged with conspiracy to commit wire fraud, and defendant 1 also faces an additional five counts of wire fraud.
The indictment alleges Defendant 1 claimed to have access to medical-grade nitrile gloves during the ensuing demand for medical personal protective equipment amidst the COVID-19 pandemic. Medical companies allegedly paid him $39 million to buy the in-demand gloves. However, he did not have any gloves at all and never delivered them to anyone that had made purchases, according to the charges.
Defendant 2 served as a logistics operator and delayed or stalled the delivery process when companies became concerned about their order of gloves not arriving, according to the charges.
Healthcare professionals who were on the frontlines during the fight against COVID-19 were expected to use the gloves, according to the charges. As a result of this scheme, one victim allegedly lost over $13 million.
The indictment also includes the forfeiture of the residence of Defendant 1 which is valued at over $2 million. The charges allege the house was purchased with money profited during the scheme. If convicted, both men face up to 20 years in federal prison and a possible $250,000 maximum fine.
Compliance Perspective
Issue
It is critical that healthcare workers on the frontline battling COVID-19 are provided with personal protective equipment (PPE) that gives them effective protection. The purchasing department must ensure that all PPE is purchased from a reputable company. Staff that utilize PPE should be aware of what they can do if they suspect any PPE is counterfeit or does not provide effective protection.
Discussion Points
- Review policies and procedures that guide the purchasing of PPE to ensure they stipulate that PPE will only be purchased from reputable companies. Update policies as needed.
- Train purchasing department personnel so that they are able to identify and purchase from reputable suppliers of PPE. Train healthcare workers on steps that they should take if they suspect that PPE may be counterfeit or ineffective in any way.
- Periodically audit the inventory of PPE to ensure that it fits properly and provides effective protection. Determine that all PPE and other essential supplies are only purchased from reputable companies and are of medical quality. Review the emergency plan for managing PPE inventory should the regular supply be interrupted.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
