A Georgia man was sentenced to almost six months in home confinement after pleading guilty to an attempt to sell over $300 million worth of N95 face masks to a foreign government. Prosecutors said the masks never existed. In the scheme, Paul Penn of Johns Creek, Georgia was to act as a middleman to sell 50 million 3M Model 1860 respirator masks to a foreign government, federal prosecutors said.
On Tuesday, Penn was sentenced to five months and 29 days of home confinement, Bobby L. Christine, U.S. Attorney for the Southern District of Georgia, said in a statement. He was also ordered to pay a $1,500 fine and sentenced to three years of probation. "If not for the vigilance of the U.S. Secret Service, Paul Penn, and his co-conspirators likely would have lit the fuse on an international scandal by ripping off a friendly foreign government for more than $300 million," Christine said. "Instead, they halted the scheme before the criminals got a dime, and prevented these crooks from profiting from pandemic fear."
Penn, through his company Spectrum Global Holdings, LLC, planned to work as a middleman in exchange for a portion of the $317 million a foreign government he and his unnamed co-conspirators hoped would pay for the masks. The conspirators got the unnamed government to agree to pay over 500% more than the normal market value for N95 masks before the coronavirus pandemic, prosecutors said in May. Penn claimed the masks were owned by a group he was linked to. The government wired the money to Penn, but the Secret Service intercepted it before the transaction was completed.
"This case should serve as a strong deterrent to those considering exploiting the COVID-19 pandemic to enrich themselves through fraud. The nation's citizens, businesses, and our international partners are counting on the U.S. Secret Service and its federal law enforcement and private sector partners to safeguard it and maintain the public trust," Glen M. Kessler, Resident Agent in Charge of the Secret Service Savannah Office, added Tuesday. "Tackling the threat of cyber-enabled COVID-19 scams requires an immediate response to safeguard our nation during these unprecedented times."
Throughout the coronavirus pandemic, criminals have been attempting to pull off scams with N95 masks. Last month, federal officials indicted Rodney L. Stevenson II of Michigan, charging him for selling $3.5 million worth of N95 and N99 face masks he never delivered to customers. Stevenson allegedly used Gmail accounts under fake names to communicate with customers when they would complain about never receiving their masks. He eventually sent some customers masks, but they did not meet the standards of real N95 or N99 masks. If convicted of all charges, Stevenson could be sentenced to up to 20 years in prison.