Wednesday, August 03, 2022

Can't Let a Crisis Go to Waste: Two arrested in $39M PPE Fraud Scheme

In the Can't Let a Crisis Go to Waste Category,  two suburban Houston men Caleb Jordan McCreless, 32, Richmond, and Christopher Luke McGinnis, 39, Spring, were arrested today in $39M  a personal protection equipment (PPE) fraud scheme. In a six-count indictment returned July 28 McCreless and McGinnis are charged with conspiracy to commit wire fraud. McCreless also faces an additional five counts of wire fraud.

According to the indictment, McCreless represented to have access to medical-grade nitrile gloves during heavy demand for medical personal protection equipment amidst the COVID-19 pandemic. During this period, healthcare professionals  on the frontlines were expected to use the gloves.Medical companies allegedly paid him $39 million to buy the in-demand gloves. However, McCreless did not have any gloves at all and never delivered them to anyone that had made purchases, according to the charges. McGinnis 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.

As a result of the PPE scheme, one victim  lost over $13 million.The indictment also includes the forfeiture of the residence of McCreless in Ft. Bend County 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.

The FBI and Harris County Constable’s Office - Precinct 1 conducted the investigation. Assistant U.S. Attorney Thomas H. Carter is prosecuting the case.

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