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Houston man pleads guilty in scheme to sell $317 million bogus masks to Australian state

Stock MarketsJul 28, 2021 06:32PM ET
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© Reuters.

By Jonathan Stempel

(Reuters) -A Texas man has pleaded guilty to involvement in a scheme to fraudulently sell 50 million N95 respirator masks he did not have for $317.6 million to the government of New South Wales in Australia, U.S. prosecutors said.

Arael Doolittle entered his plea to a wire fraud conspiracy charge on Tuesday before U.S. District Judge Lynn Hughes in Houston.

Prosecutors said Doolittle and co-defendant Paschal Eleanya tried to sell 3M-branded masks at five times the list price, hoping to collect up $275 million with the rest going to their "broker" and to representatives of New South Wales' government.

The U.S. Secret Service broke up the transaction before it was completed, an indictment last November said.

Doolittle, of Houston, faces up to five years in prison at his scheduled Oct. 25 sentencing, and will remain in custody until then.

Kevin Cobb, a federal public defender representing Doolittle, declined to comment on Wednesday.

Charges remain pending against Eleanya. In an email, his lawyer Ali Fazel called Eleanya a "middleman" who tried to ensure the parties got what they were negotiating for.

"We are working hard to demonstrate his conduct was above board and hope the government will dismiss his charges," Fazel said.

Doolittle separately pleaded guilty in June to wire fraud in connection with an alleged scheme to defraud investors in oil and gas transactions.

Prosecutors in that case agreed to recommend he spend four years in prison in addition to his sentence in the mask case.

3M Co, the world's largest maker of N95 masks, has tried since the COVID-19 pandemic began to stop price-gouging and other improper sales for its masks, including by filing 36 lawsuits and seizing more than 41 million counterfeit masks.

In a statement, the St. Paul, Minnesota-based company said it was pleased with the guilty plea, and appreciated U.S. Department of Justice efforts to stop people from illegally exploiting demand for its masks.

Houston man pleads guilty in scheme to sell $317 million bogus masks to Australian state
 

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Comments (4)
Todd Gray
Todd Gray Jul 28, 2021 7:22PM ET
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sounds like a liberal tax scheme. now libs are blabbing on about high property taxes, when they're the party who've raised property taxes on everyone for decades. every renter pays for those property tax increases with their annual rent hikes. everybody consumer pays more for everything they buy to pay for commercial property tax hikes. those lovely landlords & business owners pass the expense right to the consumer. glad you liberals care so much about people. I don't vote. not my fault. there is no honest party to vote for.
HD HD
HD HD Jul 28, 2021 6:59PM ET
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sounds like like a Trump scheme.
John Lakran
John Lakran Jul 28, 2021 6:59PM ET
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Except the name suggests he is a Biden clueless brainwashed voter
Amon Inv
Amon Inv Jul 28, 2021 6:38PM ET
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What exactly is illegal here? People find buyers all the time for things they do not have yet
John Lakran
John Lakran Jul 28, 2021 6:38PM ET
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Pricing was the first illegal part as price gouging for items such as masks were deemed illegal during pandemic. 2nd selling items you don't have is fine selling items you don't have and could not get nor had the relationship in place to deliver is illegal. I can imagine he certified he could obtain said goods among other qualifiers to bid on a government contract most of not all where false statements and hence click click clank
Todd Gray
Todd Gray Jul 28, 2021 6:38PM ET
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I don't think you can financially exploit emergency situations. like charging 400% more than normal for an item. imagine being in a earthquake, and someone charges you $10 for each little bottle of water, for your family of five.
Amon Inv
Amon Inv Jul 28, 2021 6:37PM ET
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What exactly is illegal here? People find buyers all the time for things they do not have yet
 
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