Hollywood Man Arrested on Indictment Alleging He Fraudulently Sought over $65 Million in COVID-19 Employment Tax Credits
LOS ANGELES – An Orange County man pleaded guilty today to defrauding companies who in mid-2020 paid for COVID-related medical protective equipment that was never delivered, causing more than $3 million in losses.
Christopher John Badsey, 62, of Lake Forest, pleaded guilty to four counts of wire fraud.
According to his plea agreement, in June and July of 2020, Badsey lied to three victim companies when he told them he had access to millions of boxes of nitrile gloves through his Irvine-based company, First Defense International Security Services Corp. (FDI). This type of personal protective equipment was in high demand and short supply during the early months of the COVID-19 pandemic.
Badsey agreed by contract to sell millions of boxes of gloves to each of the three companies. But Badsey told the companies’ representatives that before they could inspect the gloves, which he claimed were stored in a warehouse in Los Angeles, the companies would be required to pay deposits of upwards of $1 million to FDI. In fact, Badsey did not have any gloves stored in any warehouse.
Badsey instructed the companies to wire the deposits to accounts controlled by himself, FDI or a co-schemer. Relying on Badsey’s false statements, the companies wired a total of $3,231,990 to these accounts.
As part of his plea agreement, Badsey has agreed to forfeit all title and interest in money or items derived from his crimes, including a yacht, a pontoon boat, two Mercedes-Benz automobiles, two Ford pickup trucks, an RV, a tractor, three ATVs, miscellaneous fishing equipment, and $58,923 in cash.
United States District Judge Josephine L. Staton scheduled a September 15 sentencing hearing, at which time Badsey will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count.
The FBI investigated this matter.
Assistant United States Attorneys Melissa S. Rabbani and Kristin N. Spencer of the Santa Ana Branch Office are prosecuting this case.
Public Information Officer