Michigan Man Charged With COVID-19-Related Wire Fraud Scheme
Defendant Allegedly Ran Website That Fraudulently Sold but Failed to Deliver N95 Masks to Customers
SAN FRANCISCO – The United States Attorney’s Office for the Northern District of California unsealed charges today in a criminal complaint charging Rodney L. Stevenson II with wire fraud for his operation of an e-commerce website that allegedly scammed customers into paying for N95 masks that they never received. The announcement was made by United States Attorney for the Northern District of California David L. Anderson, United States Attorney for the Western District of Michigan Andrew Byerly Birge, U.S. Postal Inspection Service San Francisco Division Postal Inspector in Charge Rafael E. Nuñez, U.S. Postal Inspection Service Detroit Division Acting Inspector in Charge Felicia George, FBI Special Agent in Charge John F. Bennett, and FBI Special Agent in Charge Detroit Field Division Steve D’Antuono.
“Hospitals, healthcare providers and everyday people are understandably anxious to obtain N95 masks, N99 filters and other PPE,” said U.S. Attorney Anderson. “The criminal element is always ready to prey on fear and uncertainty, and it is all too easy to lie over the internet. While sheltering in place, Americans are shopping on the internet like never before. The complaint alleges a consumer’s nightmare of fake webpages and false promises.”
“The reach of federal law enforcement is long. If someone uses the internet to commit alleged fraud, their victims can be from anywhere and they could find themselves facing those victims and subject to serious federal charges far from home,” said U.S. Attorney Birge. “After some preliminary hearings here in West Michigan, all future proceedings related to these very serious allegations will be in Northern California.”
“The United States Postal Inspection Service has a long history of successfully investigating complex fraud cases,” stated San Francisco Division Inspector in Charge Nuñez. “Anyone or any organization engaging in deceptive practices, especially if they are attempting to exploit the COVID-19 pandemic emergency, should know they will not go undetected and will be held accountable. The collaborative investigative work on this case conducted by Postal Inspectors, our law enforcement partners, and the United States Attorney’s Office illustrates our efforts to protect consumers.”
“The FBI will pursue criminals who attempt to deceive and defraud consumers at the expense of public safety during this pandemic,” said FBI Special Agent in Charge Bennett. “During this crisis, the FBI remains vigilant in deterring, detecting, and investigating wrongdoing and will rigorously pursue those individuals and groups attempting to victimize the American public.”
According to the complaint, Stevenson, 24, of Muskegon, Michigan, controlled EM General, a Michigan limited liability company created in September 2019. EM General operated a website that purported to sell an available inventory of “Anti-Viral N95” respirator masks. An N95 respirator mask is a particulate-filtering facepiece respirator that meets the U.S. National Institute for Occupational Safety and Health N95 standard of air filtration. N95 masks, which cover the user’s nose and mouth, are required to filter at least 95% of airborne particles.
The complaint alleges that EM General, through its website, falsely claimed to have N95 respirator masks “in stock” and available for sale and shipment during the shortage caused by the COVID-19 pandemic. Based on these and other representations, customers bought masks from the website, sometimes paying EM General more than $40 or more per mask. Stevenson is alleged to have taken several steps to fraudulently make EM General appear to be a legitimate company. For example, Stevenson invented a fictional Chief Executive Officer, “Mike Thomas,” from whom fraudulent emails were sent, as well as several other fake officers or employees of the company. Stevenson also used stock photographs from the internet to create a page depicting this team of fake professional management staff. After customers made their first purchase, the defendant offered additional masks to those customers at discounted prices.
The complaint describes how four victims paid for, but did not receive, N95-compliant masks. Three of the four victims reside in the San Francisco Bay Area, including one hospital employee. Also described in the complaint are follow-up emails from EM General to customers in which false excuses about supply and shipping issues were made. Three of the four customers in the complaint never received the promised products at all despite multiple representations that the masks had been shipped. The fourth customer paid over $400 on March 2, 2020, for N95 masks represented to be “in stock,” and, after raising several complaints, on March 27, 2020, received cheaply made fabric masks. The masks, delivered in a white envelope with no return address, did not comply with the N95 standard that EM General purportedly sold.
Stevenson is charged with wire fraud, in violation of 18 U.S.C. § 1343. A complaint merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Stevenson was arrested at his home in Muskegon, Michigan, made his initial appearance before the United States District Court for the Western District of Michigan in Grand Rapids, and was released on supervised bond. Stevenson’s next scheduled appearance is set for May 18, 2020, in the Western District of Michigan for a preliminary hearing.
If convicted, the defendant faces a maximum sentence of 30 years in prison, 5 years of probation, and a fine of $1,000,000. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California. This case is being investigated jointly by the San Francisco and Detroit Divisions of the United States Postal Inspection Service and the San Francisco and Detroit field offices of the Federal Bureau of Investigation.