COVID scammer sentenced for defrauding investors with fake products and false documents

Editor's Note:
This matter occurred on date indicated, but not published at that time due to government shutdown. Press release posted and made available following the return to normal operations.   

HOUSTON – A 31-year-old Houston resident has been sentenced for wire fraud in a $12.5 million scam that victimized investors in the Southern District of Texas, announced U.S. Attorney Nicholas J. Ganjei.

Robert Maxwell pleaded guilty April 10.

U.S. District Judge Alfred H. Bennett has now ordered Maxwell to serve 90 months in federal prison to be immediately followed by three years of supervised release and full restitution to the victims. At the hearing, the court heard testimony that Maxwell was currently engaged in another possible fraudulent scheme by managing and attempting to sell a company in the medical clinic trial space called “ClinConnect.” Additionally, the court heard evidence that shortly before sentencing, Maxwell forged a letter from the managers at his former luxury apartment complex in Los Angeles and submitted it to the Probation Department in an attempt to provide an alibi for his whereabouts while on bond.  

In handing down the sentence, the court noted the complex and relentless nature of the Maxwell’s scheme and stated that Maxwell preying upon people’s fears during the early years of the COVID-19 pandemic was “despicable.” 

When the pandemic emerged, Maxwell falsely represented to investors that he had procured a manufacturing contract with a Chinese company for personal protective equipment such as masks and gloves. He also purported to have a domestic agreement to sell the PPE.

He used fabricated bank records, agreements and other documents to solicit millions in investments to aid in this purported venture. He then pocketed the investment funds, while the PPE never existed.

At the same time, Maxwell agreed to help produce an at-home aerosol product intended to kill coronavirus. While again taking in millions from investors, Maxwell claimed he was working with a manufacturing plant in Texas and an out-of-state distributor to produce and deliver the product to major retailers.

Maxwell told victims that retailers were selling out of the product and ordering millions of additional units in a bid to obtain additional investor funds. However, the entire arrangement was a fraud. No one had even manufactured the product, retailers had never heard of it nor of Maxwell, and he had fabricated all the documents he showed to investors to bolster the scheme.

Maxwell admitted to stealing more than $12.5 million from victims in the course of his fraudulent scheme.

Previously released on bond, Maxwell was taken into custody immediately following the sentencing where he will remain pending transfer to a Federal Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation with the assistance of Houston Police Department. Assistant U.S. Attorneys Christian Latham and Thomas Carter prosecuted the case.