January 18, 2021 - Last week, SAN FRANCISCO – The United States Attorney’s Office for the Northern District of California filed an indictment charging defendant Rodney L. Stevenson II with wire fraud, mail fraud, and money laundering for his operation of an e-commerce site that claimed to have N95 masks for sale during the current COVID-19 epidemic, announced United States Attorney David L. Anderson, U.S. Postal Inspector in Charge Rafael E. Nuñez, and Federal Bureau of Investigation Special Agent in Charge Craig Fair.  Stevenson was previously arrested and charged via criminal complaint.

According to the indictment, Stevenson operated EM General, a Michigan limited liability company created in September 2019, which purported to sell N95 masks with N99 filters.  At the onset of the COVID-19 pandemic in February 2020, EM General and its website, controlled by Stevenson, advertised that it had N95 masks “in stock” and available for shipping.  EM General sold many of these masks for as much as $24.95 each.  Also according to the indictment, to bolster the legitimacy of EM General, Stevenson created a professional-looking website that included the names, backstories, and stock photographs of a group of fake EM General executives.  It also falsely described how long the company had been in business, its sales volume, and its reputation.  Stevenson also used fictitious names in emails to customers.

The indictment alleges that, as the pandemic worsened and demand for N95 masks increased dramatically, EM General’s sales skyrocketed.  EM General’s total sales from approximately on or about February 11, 2020, to approximately on or about March 8, 2020, were approximately $3,500,000 involving over 25,000 customers, the vast majority of which were sales of N95 masks that were never delivered to customers.  This amount included over $900,000 in sales on February 28, 2020, alone. 

According to the indictment, Stevenson and EM General delivered almost none of the masks.  Instead, when customers complained and asked for refunds, Stevenson, at times communicating with Gmail accounts he created under the names of fake identities, generally refused to refund customers and instead offered a series of lies to fraudulently prolong his scheme while he continued selling masks.  These lies included that EM General could not offer refunds because it had already paid for the customer’s order from a manufacturer, that products would ship soon, and that customers would receive tracking orders soon.  For a small number of customers, Stevenson eventually fraudulently substituted masks that did not meet the standards set by the National Institutes of Occupational Safety and Health for N95 or N99 masks, meaning that they did not filter out 95 or 99 percent of particulate matter from the air.

Stevenson is charged with nine counts of wire fraud, in violation of 21 U.S.C. § 1343; one count of mail fraud, in violation of 18 U.S.C. § 1341; five count of laundering of monetary instruments, in violation of 18 U.S.C. § 1956(a)(1)(A)(i); and one count of money laundering, in violation of 18 U.S.C. § 1957. 

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendant faces a maximum sentence of 20 years of prison, 5 years of probation, and a fine of $250,000 for each count of wire fraud or mail fraud, and a maximum sentence of 10 years of prison, 3 years of probation, and a fine of $250,000 for each count of laundering of monetary instruments or money laundering.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 

Stevenson was charged by criminal complaint with one count of wire fraud on April 22, 2020.  He is currently scheduled for arraignment on the indictment on January 15, 2021, before Alex Tse, U.S. Magistrate Judge.

The case is being prosecuted by the Special Prosecutions Section the United States Attorney’s Office for the Northern District of California.
Source: DOJ