Rochester Man Indicted on Fraud Charges for Allegedly Operating a Medical Equipment Reseller Business that Defrauded Victims of More Than $250,000 | USAO-CDIL

SPRINGFIELD, Ill. – A federal grand jury has indicted a Rochester, Ill., man, Chase Brown, 20, of the 1000 block of Heathrow Lane, Rochester, Ill., on fraud charges for allegedly operating a medical equipment reseller business that defrauded businesses from various states of more than $250,000. Brown was previously arrested and charged in a criminal complaint filed in March 2020. Brown was arrested on March 10, 2020, in the Middle District of Florida and made his initial appearance in federal court in Tampa, Fla. Brown has been transferred to the Central District of Illinois and has been ordered to remain detained in the custody of the U.S. Marshals Service.

The indictment alleges Brown established a business known as Midwest Surgical, LLC, in May 2019, purportedly to engage in the purchase and resale of medical equipment. As part of the scheme, in December 2018, seven months after forming the business, Brown applied for an aviation credit card. In the application, the indictment alleges that Brown falsely stated that Midwest’s annual revenue was more than $18 million and that it employed 26 employees. After obtaining the credit card, Brown incurred more than $200,000 in charges for fuel, private charter flights and plane maintenance, including approximately $4,500 from an aviation company in Springfield, Ill.

Brown allegedly made repeated false and fraudulent promises and representations to various persons and businesses throughout the country that he would buy or sell medical equipment that he had no intention or ability to sell or purchase. After falsely representing that he would sell medical equipment, Brown used the buyers’ credit card information for personal purchases for himself and one or more of his friends but never provided the equipment to the buyer, Similarly, after falsely representing to a seller that he would purchase medical equipment, Brown provided false or fraudulent payment information, knowing that he had no intention or ability to legitimately fund the purchases.

As alleged in the indictment, Brown contacted and defrauded victim businesses in Pennsylvania, Illinois, Texas and Idaho, including in October 2019, when Brown entered into a consignment agreement with an Illinois hospital to liquidate its equipment. As part of the agreement, Brown was required to make two payments of $375,000 to the hospital. Although Brown received the equipment, the $375,000 check he provided bounced and he falsely represented that he submitted a separate $375,000 wire transfer that never occurred. Brown ultimately returned most of the equipment to the hospital but retained approximately $10,000 worth of equipment for which he made no payment.

The indictment alleges Brown used another victim’s credit card information to purchase a used Jeep Wrangler, a set of tires for the vehicle, to pay a bill at a Springfield sports bar, payment to a law firm, and the purchase of a second vehicle for a friend.

The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General and the Springfield Police Department conducted the investigation. Assistant U.S. Attorney Timothy A. Bass represents the government in the prosecution.

If convicted, the statutory penalty for each count of wire fraud (two counts) is up to 30 years in prison; for access device fraud, the penalty is up to 10 years in prison.  

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.

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Author: Editor
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