Scottsdale Man Charged In Fraudulent Mask Scheme: Officials

SCOTTSDALE, AZ — A Scottsdale man has been charged with wire fraud and money laundering after claiming to be a 3M face mask distributor, according to a news release from the U.S. Attorney's Office.

The man was identified as Dale L. Hipes, 39. The CEO of a company called BRI Supply, Inc., Hipes falsely claimed that he coudl procure 3M masks for the state of Texas in three days or less at the height of the pandemic, and also said that he was an authorized face mask distributor.

“Eight months ago we launched a Task Force to discover and stop fraud related to Covid-19 in our state,” U.S. Attorney Michael Bailey said in a statement. “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 release, the victim wired Hipes $16.65 million to purchase nine million masks that were never produced. Hipes then returned $12 million to the victim, keeping the rest for himself, and cut off all communication with the man.

Law enforcement officials have seized four bank accounts and a 2020 Kawasaki utility vehicle from Hipes. The money in the accounts, according to the U.S. attorney, can be traced back to the mask scheme.

“It’s truly reprehensible that someone would misrepresent themselves and promise to provide personal protective equipment during a pandemic then take millions of the fraudulently obtained money and use it for their own personal gain,” Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office, said. “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."

Bailey and Arizona Attorney General Mark Brnovich launched the COVID-19 Fraud Task Force in April 2020, to combat fraud arising from the pandemic.

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.