Texas men charged with trying to sell 50 million bogus masks to Australian state

(Reuters) - Two Houston-area men have been criminally charged with trying to fraudulently sell 50 million N95 respirator masks they did not have to the government of New South Wales in Australia at an inflated $317.6 million price, U.S. prosecutors said on Tuesday.

FILE PHOTO: Various N95 respiration masks at a laboratory of 3M, that has been contracted by the U.S. government to produce extra marks in response to the country's novel coronavirus outbreak, in Maplewood, Minnesota, U.S. March 4, 2020. REUTERS/Nicholas Pfosi

Paschal Eleanya, 46, and Arael Doolittle, 55, were charged in a three-count indictment with wire fraud and conspiracy for trying to sell the 3M-branded masks at five times the list price to an unnamed foreign government.

Prosecutors said Eleanya and Doolittle expected to collect as much as $275 million, with the remaining money going to their “broker” and the government’s own representatives.

The U.S. Secret Service broke up the transaction before it could be completed, according to the Nov. 19 indictment, which includes text messages from both defendants.

New South Wales was identified as the foreign government at a court hearing on Tuesday, according to the office of U.S. Attorney Ryan Patrick.

Each of the two wire fraud counts carries a maximum 20-year prison term.

A lawyer for Doolittle did not immediately respond to requests for comment. Eleanya’s lawyer could not immediately be identified.

Doolittle was separately charged last month with trying to defraud 21 investors out of $1.2 million in oil and gas transactions. He has pleaded not guilty in that case.

3M Co, the world’s largest maker of N95 masks, has filed at least 19 civil lawsuits to stop price-gouging, counterfeiting and other improper sales practices for its masks.

Most of 3M’s N95 masks cost less than $2, and the St. Paul, Minnesota-based company has pledged not to raise prices because of the coronavirus pandemic.

Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and Stephen Coates