The FBI is investigating an Australian “broker” accused of being involved in a scam that promised to deliver 39 million desperately needed N95 masks to US doctors and nurses fighting to keep coronavirus patients alive.
The Australian allegedly claimed two million of the masks were sitting in a warehouse in the US state of Georgia and the product had been inspected by a certification company.
California’s powerful Service Employees International Union-United Healthcare Workers West had been on a frantic search to connect hospitals with a potential supplier which led them to a Pittsburgh businessman and a potential stockpile of 39 million N95 masks.
The 39 million masks and the two million in Georgia were a ruse, the FBI and prosecutors believe.
“There are opportunists who are looking for any victim,” Scott Brady, US Attorney for the Western District of Pennsylvania, told the Los Angeles Times.
The FBI and Mr Brady have declined to name the Australian or the Pittsburgh middleman.
The scam was detected when the FBI and prosecutors investigated whether they could intercept the huge stockpile of masks under the Defense Production Act invoked by US President Donald Trump.
The US government has the power under the act to seize supplies.
The union launched the global search for masks and other personal protective equipment in response to pleas from frontline healthcare workers who needed protection.
It led them to the Pittsburgh businessman.
The businessman had been using WhatsApp to connect with the Australian broker and a supplier in Kuwait.
The Australian and the Kuwaiti supplier are now targets of the US investigation.
Prosecutors said the union and the Pittsburgh businessman appear to be among a string of middlemen fooled by the scam.
No money was exchanged but desperate hospitals were hit hard by the ruse.
Healthcare company Kaiser Permanente had placed an order for six million masks, but received nothing.
“We believe we disrupted fraud,” Mr Brady said.
“We are seeing (personal protective equipment) fraud in every variation, but mostly in respect to N95 masks.
“We have an anxious public, and resources are strained.”
SEIU-UHW spokesman Steve Trossman said hospitals desperate for equipment for their employees are encountering roadblocks and fraudsters.
“We know hospitals and others are facing the same issues as states, counties, cities and everyone else: shipments delayed, deals falling through, bidding wars, suppliers committing the same stock to multiple buyers, fraudulent actors and federal government intervention,” Mr Trossman said.
“One major health system has since told us that for every 100 leads they get on supplies, 99 fall through.”