PHOENIX, Ariz. – Yesterday, the United States Attorney’s Office unsealed a complaint against Dale L. Hipes, 39, of Scottsdale, Arizona, charging him with wire fraud and money laundering in connection with an alleged scheme to defraud by falsely claiming to be a distributor of 3M face masks.
“Eight months ago we launched a Task Force to discover and stop fraud related to Covid-19 in our state,” said United States Attorney Michael Bailey. “Today’s announcement is a product of that effort. We remain committed to the task at hand, and will remain committed even after the pandemic ends.”
According to the complaint, Hipes, as CEO of BRI Supply, Inc., represented that he could procure 3M masks for the State of Texas during the COVID-19 pandemic. He falsely claimed to be a 3M authorized distributor and promised delivery in three days. The victim wired $16.65 million to Hipes to purchase nine million masks, but Hipes never produced any. Instead, Hipes returned $12 million to the victim then ceased all communications and expended the remaining funds for personal use. Law enforcement also seized four bank accounts, and a 2020 Kawasaki utility vehicle. These bank accounts and utility vehicle are alleged to contain, or have been purchased with, proceeds traceable to the charged crimes.
“It’s truly reprehensible that someone would misrepresent themselves and promise to provide Personal Protective Equipment (PPE) during a pandemic then take millions of the fraudulently obtained money and use it for their own personal gain,” said Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office. “It is also not lost on us that this act is deliberately contrary to the actions of the philanthropist who fronted the money to the State of Texas in the first place. We want to thank 3M for their assistance and cooperation with this investigation as well as the United States Attorney’s Office, District of Arizona.”
United States Attorney Michael Bailey and Arizona Attorney General Mark Brnovich launched the COVID-19 Fraud Task Force in April 2020, leveraging the resources and expertise of more than twenty different federal and state agencies to combat fraud schemes arising out of the COVID-19 pandemic. The Federal Bureau of Investigation conducted the investigation in this case. The prosecution is being handled by Assistant U.S. Attorney Andrew C. Stone.
A conviction for wire fraud carries a maximum penalty of twenty years of imprisonment, a $250,000 fine, or both. A conviction for transactional money laundering carries a maximum penalty of ten years of imprisonment, a $250,000 fine, or both.
A criminal complaint is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
CASE NUMBERS: 20-9393MJ
RELEASE NUMBER: 2020-112_Hipes
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
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