Two Houston men arrested in $39M personal protection equipment fraud scheme
HOUSTON, TX -- Two suburban Houston men have been charged with conspiracy to commit and committing wire fraud during the COVID-19 pandemic involving medical-grade nitrile gloves, announced U.S. Attorney Jennifer B. Lowery.
Authorities took Caleb Jordan McCreless, 32, Richmond, and Christopher Luke McGinnis, 39, Spring, into custody today. They are expected to make their initial appearance before U.S. Magistrate Judge Yvonne Ho at 2 p.m. Aug. 3.
The six-count indictment returned July 28 charges McCreless and McGinnis with conspiracy to commit wire fraud. McCreless also faces an additional five counts of wire fraud.
The indictment alleges McCreless purported to have access to medical-grade nitrile gloves during the ensuing demand for medical personal protection equipment amidst the COVID-19 pandemic. Medical companies allegedly paid him $39 million to buy the in-demand gloves. However, McCreless did not have any gloves at all and never delivered them to anyone that had made purchases, according to the charges.
McGinnis served as a logistics operator and delayed or stalled the delivery process when companies became concerned about their order of gloves not arriving, according to the charges.
Healthcare professionals who were on the frontlines during the fight against COVID-19 were expected to use the gloves, according to the charges.
As a result of this scheme, one victim allegedly lost over $13 million.
The indictment also includes the forfeiture of the residence of McCreless in Ft. Bend County which is valued at over $2 million. The charges allege the house was purchased with money profited during the scheme.
If convicted, both men face up to 20 years in federal prison and a possible $250,000 maximum fine.
The FBI and Harris County Constable’s Office - Precinct 1 conducted the investigation. Assistant U.S. Attorney Thomas H. Carter is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.