The men allegedly shrink-wrapped stacks of empty boxes and claimed they were full of masks to be sold to health-care providers.
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They also allegedly created a website for their company, International Commerce and Investment Group (ICIG), and claimed to have been in the business of selling PPE since 2014.
The defendants were identified as Donald Lee Allen, 62, of Riverside, and Manuel Revolorio, 37, of Rancho Cucamonga.
They are being prosecuted by the U.S. Attorney's Office in Brooklyn, NY.
They were asking one potential investor to wire $4 million to help secure the masks.
Prosecutors say one of the "investors" that the two men pitched their scheme to was actually an undercover federal law enforcement agent.
They were arrested Monday in California and are facing charges of conspiracy to commit wire fraud in a federal court in Brooklyn.
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National authorities have set up a hotline for fraud, hoarding and price-gouging related to COVID-19. Reports can be made to the National Center for Disaster Fraud's National Hotline at (866) 720-5721, or e-mail: disaster@leo.gov.
Los Angeles unapproved home test kit
Locally in Los Angeles, City Attorney Mike Feuer said his office has settled a lawsuit with a California company that was advertising and selling an at-home test for coronavirus exposure and immunity that was not approved by the Food and Drug Administration.
The company, RootMD, Inc. was allegedly selling at-home tests on its website for $249. The test was not approved or authorized by the FDA. The federal agency has only approved one at-home test at this point, and that was not the one marketed by RootMD.
Under the agreement with Feuer's office, the company will stop selling the "COVID-19 At-Home Exposure and Immunity Test Kit" and provide refunds for all tests already sold. The company will also pay civil penalties of $5,000.
Suspected price-gouging or scams related to the coronavirus in Los Angeles can be reported to Feuer's office online here or by calling (213)978-8070.