A GRAVE WARNING ABOUT INADVERTANTLY INVOLVING YOURSELF IN A SCHEME INVOLVING THE SUPPLY OF PERSONAL PROTECTIVE EQUIPMENT
Personal Protective Equipment or PPEs as they are commonly referred to are needed critically for caregivers, first responders, service personnel and the public in general – and there isn’t enough to go around. Nurses and Doctors in New York were recently told they would be given two N95 masks and that they should switch off every other week which one they used. A mask that would normally be used once, briefly is now for hundreds of patients over seven days or longer. And then there’s gowns, gloves and other equipment necessary to contain the spread of Covid 19 and protect the front-line workers.
Whenever there’s a desperate need for something, there are those who genuinely want to help, and can deliver. Then there are those who want to help but cannot deliver. And then, there are those who don’t want to help, but want to profit by defrauding a desperate entity with financial gain supplying the motivation.
The related issue of Price Gouging under federal law in different from most State and local jurisdictions. Always research this before marketing your inventory.
The FBI and other law enforcement agencies are raising the alert of these scams, but they are targeting the obvious victims. I’m concerned about you – the individual or small business owner who gets a solicitation from someone you know that “Hey, I know a company overseas that has a surplus of PPEs they want to sell. Do you know anyone who wants them and has funds?”
So you see what sounds like an opportunity to do good and make some money on the side. You reach out to the procurement team at your local hospital or jail or your county officials and let them know what you can help them with – showing them a spreadsheet with inventory and corresponding prices. Of course, you’re not even the middleman- you’re just making an introduction – just making the connection. Your contact has said he will share some profits with you on the back end. What could go wrong?
Who says no to doing a good deed and making money during this crisis?!
While such opportunities do exist, you need to pinch yourself and take a deep breath. In this day and age, how hard is it for someone in Southeast Asia to find an email address or a phone number and reach out on their own as legitimate businesspeople?
So there goes your plausible deniability.
“Hey, my name isn’t on the contract!”
“I didn’t touch the money!”
“I simply introduced them!”
“I had no idea it was a scam!”
You can cry all these things from a mountain top, but it won’t remove you from suspicion, investigation, possible indictment and you may find yourself facing federal charges for millions of dollars of fraud – especially egregious in the eyes of the public and the prosecution because of the timing and they may even claim that your actions led to a loss of life. A hospital or other facility that reserved or spent money on the supplies you brought to your attention and never arrived would have made those funds unavailable to purchase other non-fraudulent PPEs. Their inability to have those supplies on hand would reasonably have led to a loss of lives. At the very least this will villainize your involvement.
Even introducing the supplier’s representative could be enough to link you to deaths.
What’s important is that you ask yourself the question, “Why would they come to me?” If you are satisfied that it’s reasonable that you are their resource, you can then move on to a more sophisticated level of scrutiny before taking any affirmative action, including consulting with an attorney.
There are a number of violations of the United States Code that could be implicated and keep in mind that you are here and easily reachable by the authorities as opposed to a company that may or may not be real in a foreign country. U.S.C. Title 18 covers most criminal matters under federal law and within Title 18 of the U.S. Code, Chapter 47 covers most matters that would come up regarding fraud, however, the contents of Title 18 and the entire U.S. Code is voluminous and there are many charges that could apply to situations similar to the example above.
The costs for being involved in fraud during a crisis like Covid 19 can be catastrophic and can result in a loss of personal funds and property as well as lengthy prison stays.
The most important message you can take away from this article is to consult with a good defense attorney before considering taking even the first step in helping with such a transaction. The first step may be all it takes to involve you irretrievably in a significant criminal conspiracy.
All it takes for a criminal conspiracy to be formed is a agreement and one affirmative step in furtherance of the agreement. As they say in the law, “one scintilla” which means barely anything.
If you are legitimately approached with such an opportunity, it may be a valuable opportunity to both help your community and possibly reap some financial rewards, but to avoid major pitfalls, make sure you have reliable information about the parties you are referring as well as any third parties involved and that all parties are on the up and up. The most important measure is that first question, “Why would they come to me?” If you don’t have a good answer, the situation requires serious scrutiny, or the FBI won’t believe you had good faith.
What if medical supply procurement is your business, the connection makes perfect sense and something still goes wrong? The news is filled with examples of contracts going unfulfilled, shipments not arriving, shipments waylaid, intercepted, or commandeered by the government. There was even a story about how in order to get supplies to Boston, the New England Patriots private jet flew them there surreptitiously from out of the country as the Federal Government had previously taken supplies headed for Massachusetts. There is less risk of criminal prosecution in these scenarios, however it is critical to document all aspects of the transaction and make sure you dot all your I’s and cross all your t’s to avoid the kind of scrutiny that will assuredly be employed in these highly sensitive times.
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