Business Owner Pleads Guilty to Defrauding Canadian Company That Sought to Purchase Protective Surgical Masks at Outset of Covid-19 Pandemic

 

The Defendant Received $8.2 Million and Never Provided the Promised Surgical Masks

In federal court in Central Islip, Julie Dotton pleaded guilty to wire fraud in connection with a scheme to defraud a company seeking to purchase personal protective equipment (PPE) at the outset of the COVID-19 pandemic.  The proceeding was held before United States District Judge Gary R. Brown.  When sentenced, Dotton faces a maximum sentence of 20 years’ imprisonment as well as restitution of at least $8.2 million in addition to $8.2 million in criminal forfeiture.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York and James C. Barnacle, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty plea. 

“The defendant took advantage of a provider’s need for life-saving personal protective equipment to line her own pockets,” stated United States Attorney Nocella.  “Our Office will continue to vigorously prosecute defendants who shamefully seek to profit from global health emergencies and crises like the COVID-19 pandemic.”

“Julie Dotton deprived a personal protective equipment provider of critical supplies during a global pandemic, stealing more than $8 million for her own benefit. The FBI continues to track down those who exploited the COVID-19 crisis and ensure they face the consequences for their selfish greed,” stated FBI Assistant Director in Charge Barnacle.

According to court filings, between March 2020 and October 2020, Dotton misrepresented her ability to obtain PPE to a Canadian company that was an official provider of PPE to two Canadian provinces during the earliest stages of the COVID-19 pandemic.  Using a nominal entity she controlled, Dotton entered into a contract with the company to provide approximately 12 million face masks for $8.2 million.  Dotton then caused the company to wire the $8.2 million payment to a purported third-party escrow agent’s bank account.  After a superficial attempt to purchase PPE, and rather than use the funds to procure the PPE as promised, Dotton directed others to disburse the funds to various third parties for her benefit.  After Dotton failed to procure the agreed upon PPE for the company, and the company demanded delivery of the PPE or a refund, Dotton strung them along with excuses for several months, all the while continuing to have the money disbursed for her benefit.