KEY POINTS

  • Paul Penn was charged in federal court with trying to swindle a foreign government
  • He faces 20 years in federal prison if convicted of trying to sell 50 million N95 masks
  • Penn never had a single mask in his possession, however

A man from Atlanta, Georgia managed to convince a foreign government to wire him $317 million as payment for 50 million 3M Model 1860, N95 Respirator Masks they hadn't seen and which he never had in the first place.

Paul Penn was charged in federal court Thursday with trying to swindle a foreign government. He faces 20 years in federal prison if convicted of criminal attempt and conspiracy, according to documents filed by prosecutors at the U.S. District Court in Savannah.

U.S. Attorney Bobby Christine of the Southern District of Georgia said the U.S. Secret Service stopped the transaction before it could be completed. He didn't reveal the foreign government involved.

“Using a worldwide pandemic as an opportunity to take advantage of those searching for badly needed personal protective equipment is reprehensible," said Christine.

“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.”

Court documents show Penn and at least two partners negotiated the deal between March and April through Penn's company, Spectrum Global Holdings, LLC, based in Norcross, a city in Gwinnett County, Atlanta. It said Penn agreed to act as a middleman in exchange for a cut of the $317 million sales price.

The Southern District of Georgia pointed out the negotiated sales price for the N95 Respirator Masks was more than 500% higher than the previous normal market value for the same masks. It said Penn lied to the foreign government when he said the N-95 Masks were owned by a group he was associated with.

Convinced, the foreign government wired the funds to complete the sale. The U.S. Secret Service, however, aborted the sale just before the transaction could be completed.

Resident Agent in Charge Glen Kessler of the Secret Service Savannah Office said defeating the threat of cyber-enabled COVID-19 scams requires an immediate response to safeguard the U.S.

“This case should serve as a strong deterrent to those considering exploiting the COVID-19 pandemic to enrich themselves through fraud," said Kessler.

The U.S. Health and Human Services (HHS) has issued a Notice designating categories of health and medical supplies that can't be hoarded or sold for exorbitant prices. The COVID-19 Hoarding and Price Gouging Task Force led by Craig Carpenito, United States Attorney for District of New Jersey, was created by Attorney General William Barr.

N95Masks A Brooklyn man was arrested for selling medical supplies at inflated prices. Photo: Creative Commons