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In the frantic early weeks of the COVID-19 pandemic, fraudsters in the U.S. allegedly swindled funds that were supposed to buy 12 million face masks for Canadians, according to a new criminal indictment.
2 New Yorkers alleged to have defrauded supplier to Canadian provinces
Alexander Panetta · CBC News
· Posted: May 03, 2024 4:28 PM EDT | Last Updated: May 3
Fraudsters in the U.S. swindled funds that were supposed to buy 12 million face masks for Canadians in the frantic early days of the COVID-19 pandemic, a new criminal indictment alleges.
American authorities this week arrested two residents of New York state, charging them with wire fraud in an alleged $8.2-million US scam.
Jonathan Cannon and Julie Dotton are accused of devising a scheme in which they falsely promised millions of masks to a Canadian company that was supplying two provinces.
"The defendants sought to take advantage of a provider's need for life-saving personal protective equipment through a fraudulent scheme that was designed in reality to line their own pockets," said U.S. Attorney Breon Peace.
"Fraudsters who sought to capitalize on the worldwide pandemic will be brought to justice. There is no free pass for COVID-19 fraud."
Starting in March of 2020, the suspects are accused of promising to deliver million of these masks, allegedly signing a contract in April for a mixture of N95s and three-ply SMS 3s.
The indictment does not name the Canadian buyer or provinces allegedly victimized. However, the case details, suspect names, and the dollar amount, all match those in an earlier civil suit.
Names and dollar amounts match earlier civil suit
In that civil suit, a Montreal-based company, Busrel Inc., said it was an official provider of personal protective equipment to the provinces of Quebec and Alberta.
A source familiar with the case said the company was tasked by Canada's federal government to deliver masks to Alberta and Quebec. He said the masks were intended for hospitals and public workers.
The company won its lawsuit, filed in a U.S. district court. That 2022 ruling said Dotton lied about having good connections in China, claiming she knew a former aide to George W. Bush who could deliver the highly coveted gear. A judge ordered the suspects to repay the money.
But this new criminal indictment alleges that the suspects have only returned $250,000. The rest was allegedly transferred through multiple companies, and to the suspects' bank accounts, and even to family members.
The criminal indictment accuses the suspects of, first, failing to obtain the masks they promised. Then, of coming up with different excuses, and stringing the victims along for months when they demanded a refund.
The suspects were arrested Thursday.
Cannon, 58, lives on Long Island, near New York City, and purports to work in real estate; he was released on a $500,000 bond. Dotton, 51, lives in Orchard Park, N.Y., near Buffalo; head of a software-engineering company, she was recently fined and penalized for failing to pay employee taxes.
FBI official James Smith said these alleged crimes were not victimless.
"The defendants' alleged failure to provide these critical garments, especially during the onset of a global pandemic, selfishly deprived potential consumers and patients in need," he said in a statement.
"[These] arrests highlight the FBI's steadfast pursuit of those who jeopardize the health of others for personal financial gain."
ABOUT THE AUTHOR
Alexander Panetta is a Washington-based correspondent for CBC News who has covered American politics and Canada-U.S. issues since 2013. He previously worked in Ottawa, Quebec City and internationally, reporting on politics, conflict, disaster and the Montreal Expos.
