A Hixson man is facing federal charges in connection with an alleged COVID fraud.
David Michael Wright, who was formerly from Chickamauga, Ga., was charged with wire fraud and money laundering. He has agreed to plead guilty to the charges.
Prosecutor Steve Neff said Wright became acquainted with a resident of Chattanooga, identified only as J .F., who operated various businesses, including Premier International LLC. The criminal information says J.F. has an existing relationship with a manufacturer of hand sanitizer located in Miami, Fla.
It says Wright devised a scheme beginning in April 2020 to defraud J.F. They began discussing investing in personal protective equipment.
The prosecutor said, "Wright falsely represented to J.F. that he had contacts with Chinese manufacturers to source the manufacture of PPE products, and that Wright was importing PPE products from China which he was then selling in the United States at a significant profit, including the purchase of KN95 masks which Wright was selling to CHI Memorial.
"It was part of the scheme to defraud that on or about July 13, 2020, the defendant, Wright sent an email to J.F. with an attached fraudulent $49,700.00 pro forma invoice from an alleged Chinese manufacturer for the purported purchase of 70,000 KN95 masks which Wright falsely claimed could be purchased by J.F. and then resold to CHI Memorial Hospital for $210,000. Thus, for an investment of $49,700.00, J.F. would make a profit of $140,000.00.
"It was also part of the scheme to defraud that on July 13, 2020, Wright sent another email to J.F. with an attached fraudulent $708,000.00 proforma invoice from an alleged Chinese manufacturer for Wright's purported purchase of one million KN95 masks which he falsely represented he would resell to CHI Memorial.
"On or about July 14, 2020, J.F. sent a text message to Wright a photo of $49,700 cash which J.F. would invest in the KN95 masks; and on or about July 15, 2020, J.F. gave the cash to Wright for the intended purpose of purchasing KN95 masks which would then be sold to CHI Memorial.
"It was part of the scheme to defraud that on or about July 31, 2020, Wright sent a text message to J.F. with fraudulent DHL tracking information about the KN95 masks allegedly being delivered from China.
"After learning of J.F.'s relationship with the hand sanitizer manufacturer in Miami, Florida, Wright falsely represented to J.F. that he was friends with the CEO of Publix Super Markets, that Publix was interested in purchasing hand sanitizer from Wright and J.F.; and that Publix would be issuing a purchase order for the hand sanitizer. Relying on Wright's representations that Publix was going to purchase the hand sanitizer, J.F. ordered hand sanitizer from the Miami manufacturer, including an order of 40,000 bottles for $46,000, the cost of which Wright and J.F. were going to split evenly. On or about July 21, 2020, J.F. emailed Wright a copy of the $46,000 invoice from the Miami manufacturer.
"Wright maintained a bank account at First Volunteer Bank which Wright used for the purpose of facilitating, promoting, and concealing violations of wire fraud.
"After agreeing to pay for half the cost of the 40,000 hand sanitizer bottle order, Wright , on or about July 21, 2020, deposited $13,200 of the cash which he had received from J.F. on or about July 15, 2020, to his bank account at FVB. On or about July 21, 2020, he then wire transferred $13,000 from his FVB account to the J.P. Morgan Chase bank account of the hand sanitizer manufacturer in Miami, Florida, as a partial payment of his investment.
"On or about July 29, 2020, Wright attempted to falsely assure J.F. that Publix was going to purchase hand sanitizer; and Wright did so by texting J.F. screen shots of alleged text messages between him and the CEO of Publix. In these fraudulent text messages, the CEO allegedly assured Wright that he was instructing a Publix employee to order the hand sanitizer from Wright and J.F. However, as Wright then knew, the CEO had never sent him any texts and Wright had sent the fraudulent text messages to himself utilizing the cellphone of a family member.
"On or about August 13, 2020, Wright gave J.F. a $210,000 check drawn on Wright's FVB account payable to Premier, representing J.F.'s alleged proceeds from the sale of KN95 masks to CHI Memorial. However, as Wright knew at the time he wrote the check and gave it to J.F., there were insufficient funds in Wright's FVB account because in reality, CHI Memorial had never agreed to purchase any KN95 masks and had not paid for any masks.
"When J.F. inquired about the money due to JF. from the investments in PPE products, and why the $210,000 check had been returned for non-sufficient funds, Wright made various false statements and excuses for the delay in payment, including: a) That the FBI had frozen his bank accounts because the bank had contacted the FBI to report suspicious deposits to Wright's accounts; b) That Wright met with an FBI Agent named Kevin Garnett who eventually agreed to release Wright's money; c) That the FBI then re-seized Wright's FVB accounts alleging that Wright was price-gouging on the KN95 masks; d) That Wright had hired a price-gouging attorney who was working on getting the money in Wright's FVB accounts released, and was threatening to initiate a lawsuit against the FBI."