COVID Feature: The Wizards of Fraud

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Russian hacker hacking the server in the dark

Just about everyone is familiar with The Wizard of Oz movie. While the Wizard of Oz character appeared in different forms throughout the popular 1939 movie terrorizing Dorothy and her friends, it turned out that he was simply a conman hiding behind a curtain. Fast forward to 2020 to learn more about two men from Houston, Tex., who have been charged in a $317 million fraud scheme that attempted to sell 50 million N95 respirator masks to a foreign government at around five times the public list price. (Fortunately, authorities paid attention to the two alleged conmen hiding behind a thinly veiled curtain of fraud.)

Paschal Ngozi Eleanva, 46, and Arael Doolittle, 55, have been charged for their role in this COVID-19-related scheme that attempted to take advantage of the current pandemic. (As you might guess, the 50 million N95 masks never existed.)  

New South Wales, an Australian state, was identified as the foreign government involved. The state government allegedly wired the $317 million to the two Texans. (That is a very large sum of money to be swindled out of. Apparently, the two men hoped to pocket $275 million for themselves.) Fortunately, federal authorities stopped the transaction before it went through. (Whew!) 

Both men were charged with one count of conspiracy to commit wire fraud and two counts of wire fraud. If they are convicted on all counts, they could each face up to 45 years in prison and have to pay a fine of up to $250,000.

The lawyer representing Mr. Eleanya claims the defendant does not have a past criminal history and he did not know Mr. Doolittle. Nor was it clear if Mr. Eleanya knew he was dealing with a foreign government. Mr. Doolittle, an energy company executive, has been charged in a separate case involving the attempt to defraud 21 investors out of $1.2 million through oil and gas transactions. (Hmmm…sounds a bit suspicious, don’t you think?) It’s important to remember that an indictment is a formal accusation of criminal conduct, not evidence. These two defendants are presumed innocent unless convicted through due process of law. 

The COVID-19 Hoarding and Price Gouging Task Force is committed to preventing hoarding and price gouging for critical supplies during the pandemic. The Secretary of the Department of Health and Human Services has designated categories of health and medical supplies that cannot be hoarded or sold for exorbitant prices here. It’s important to remember that an indictment is a formal accusation of criminal conduct, not evidence. These two defendants are presumed innocent unless convicted through due process of law.

If you suspect COVID-19 fraud, hoarding or price-gouging, report it to the National Center for Disaster Fraud’s (NCDF) National Hotline at (866) 720-5721 or visit The Department of Justice’s NCDF website.

Today’s Fraud of the Day comes from a Department of Justice press release, “Two Houston men charged with attempting to fraudulently sell 50 million masks,” dated November 24, 2020.

HOUSTON – Two Houston area men have been charged for attempting to fraudulently sell 50 million non-existent N95 facemasks to a foreign government, announced U.S. Attorney Ryan K. Patrick.

Paschal Ngozi Eleanya, 46, turned himself in to authorities today and is expected to make his initial appearance before U.S. Magistrate Judge Sam S. Sheldon at 2 p.m. Authorities took Arael Doolittle, 55, into custody Nov. 20. He made his initial appearance yesterday and is set for an arraignment and detention hearing Nov. 25 at 10 a.m.

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.