May 14, 2020 10:50 AM

AG in Kansas, 13 other states to Trump: Let's hold China accountable

Posted May 14, 2020 10:50 AM
President Trump during a Coronavirus Task Force briefing last month in the Rose Garden -photo courtesy White House
President Trump during a Coronavirus Task Force briefing last month in the Rose Garden -photo courtesy White House

Tallahassee, Fla. (AP) — Republican attorneys general in 14 states asked President Donald Trump on Wednesday to form a state-federal partnership to hold China accountable for damages caused by the spread of the new coronavirus.

The letter to the president says “the Chinese communist government” may have failed to provide information or provided misinformation about the virus that led to its spread.

“The spread of COVID-19 has grievously harmed each of our States. Many of our citizens have suffered and died from this virus. Our economies have been effectively shut down. Businesses, big and small, have been devastated to the point that many will not reopen,” the letter said.

Florida Attorney General Ashley Moody and South Carolina Attorney General Alan Wilson are taking the lead on the coalition. The letter is also signed by attorneys general in Kansas, Alaska, Arkansas, Georgia, Indiana, Kentucky, Louisiana, Montana, Nebraska, Oklahoma, Tennessee and West Virginia.

While the coalition is made up of Republicans, Moody said in a phone interview that she wants to add more attorneys generals, including Democrats, as part of an effort to make China pay in some way for the pandemic.

“I don’t see this as a partisan issue. Holding a country accountable for misinformation or lack of action that could have mitigated the spread of this devastating virus is something of concern to all of us regardless of party,” she said. “Seeking damages is of concern to all of us.”

The letter is part of a growing call among state elected officials pointing blame at China for economic loss and deaths caused by the coronavirus, joining dozens of patients and businesses looking to sue China over the outbreak that has killed more than 83,000 people in the United States.

Trump is clearly not happy with China’s role in the spread of the virus. While not a response to the attorneys general letter, he criticized the country on Twitter on Wednesday, saying the virus began spreading just after the U.S. and China reached a trade deal.

“The ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference - and all those innocent lives lost!,” Trump tweeted.

Florida Republican Gov. Ron DeSantis began calling for China to be held accountable in March, saying, “How Americans view them will never be the same. They’ve never been terribly popular as a country here, but I think that we have got to hold China accountable.”

Since then, he has almost weekly criticized China and called for less U.S. reliance on the country for goods, particularly medical equipment.

Moody said the attorneys generals are examining state and federal laws to determine the best course of action against China and whether steps need to be modified to be more successful in their pursuit of accountability.

“What is the mechanism that we may utilize based on the facts that we have and based on the laws that exist or as they are modified ... that we could see success at true accountability from China?” Moody said.

The letter to Trump says state and federal governments need to look at legal, economic, diplomatic and security measures that could be taken against China.

“This will allow us to share information and resources and ensure that any remedy sought takes into consideration our legal capabilities and the devastating impact the virus has had on our States,” it said.

China informed the World Health Organization of the outbreak on Dec. 31 of last year. It contacted the U.S. Centers for Disease Control on Jan. 3 and publicly identified the pathogen as a novel coronavirus on Jan. 8.

Chinese officials muffled doctors who warned about the virus early on and repeatedly downplayed the threat of the outbreak. However, many of the Chinese government’s missteps appear to have been due to bureaucratic hurdles, tight controls on information and officials hesitant to report bad news.

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May 14, 2020 10:50 AM
Virus unleashes wave of fraud in US amid fear and scarcity
Counterfeit COVID-19 test kits-photo courtesy U.S. Immigration and Customs Enforcement

WASHINGTON (AP) — A 39-year-old former investment manager in Georgia was already facing federal charges that he robbed hundreds of retirees of their savings in a Ponzi scheme when the rapid spread of COVID-19 presented an opportunity.

Christopher A. Parris started pitching himself as a broker of surgical masks amid the nationwide scramble for protective equipment in the first desperate weeks of the outbreak, federal authorities said. He was soon taking in millions of dollars.

Except there were no masks.

Law enforcement officials say Parris is part of what they are calling a wave of fraud tied to the outbreak.

Homeland Security Investigations, an arm of the Department of Homeland Security, is leading a nationwide crackdown. It has opened over 370 cases and so far arrested 11 people, as part of “Operation Stolen Promise,” according to Matthew Albence, acting director of U.S. Immigration and Customs Enforcement.

“It’s incredibly rampant and it’s growing by the day,” Albence said. “We’re just scratching the surface of this criminal activity. ”

From a fake #COVID19 test kit photo courtesy U.S. Customs and Border Patrol

Parris was on pretrial release for the alleged Ponzi scheme when he was arrested last month in what authorities say was an attempt to secure an order for more than $750 million from the Department of Veterans Affairs for 125 million face masks and other equipment.

“He was trying to sell something he didn’t even have,” said Jere T. Miles, the special agent in charge of the New Orleans office of Homeland Security Investigations, which worked the case with the VA Office of Inspector General. “That’s just outright, blatant fraud.”

Parris has not yet entered a plea to fraud charges and his lawyers did not respond to requests for comment from The Associated Press.

Nationwide, investigators have turned up more than false purveyors of PPE. They have uncovered an array of counterfeit or adulterated products, from COVID-19 tests kits and treatments to masks and cleaning products.

Steve Francis, director of the National Intellectual Property Rights Coordination Center, which is overseen by Immigration and Customs Enforcement, says authorities have tracked counterfeits flowing into the U.S. from 20 countries and for sale through thousands of websites.

“There are people popping up who have never been in the business of securing equipment on a large scale,” Francis said.

Enter Parris.

From his home outside Atlanta, he claimed to represent a company with 3M respiratory masks and other protective equipment for sale. At the time, there was a mad scramble for supplies that pitted state and local governments against each other.

As outlined in court documents and interviews, his pitch reached a company in Baton Rouge, Louisiana, that was trying to help government agencies acquire PPE. In late March, it contacted the VA, which was dealing with a critical shortage of protective equipment.

The VA was suspicious of the price, about 15 times what it was paying amid the shortage, and alerted its inspector general, which brought in Homeland Security. That resulted in a sting that led to Parris.

“He had no means of producing any PPE,” Albence said. “It was just a scam.”

Coronavirus test kits that were not FDA approved-photo U.S. courtesy Customs and Border patrol

But it had some takers. Federal authorities say a Parris-controlled bank account received more than $7.4 million, with most appearing to come from unidentified entities trying to buy safety gear in March and April, according to court documents. He wired some of the money to accounts overseas, including more than $1.1 million to a Swiss company’s bank that authorities say may be a shell corporation.

The U.S. government seized more than $3.2 million from his accounts.

The Ponzi scheme was unrelated to the alleged attempt to defraud the VA but “is sufficiently similar to the conduct in this case that it is relevant to his plan, intent, and modus operandi,” according to a search warrant affidavit.

In the earlier case, Parris and his partners are accused of defrauding about 1,000 people out of at least $115 million from January 2012 to June 2018. They persuaded the victims to turn over their savings for what turned out to be nonexistent investments, according to the Securities and Exchange Commission.

Another member of the partnership, Perry Santillo, pleaded guilty to fraud in November.

As part of the alleged scheme, Parris and the others bought the businesses of investment advisers who were retiring and leveraged the trust those advisers had built up over the years to pitch the bogus investments, with relatively modest returns, to their newly acquired clients.

Florida attorney Scott Silver, who represented some investors who sought to get their money back after the SEC shut down the operation, said there was little to recover because Parris and the others spent most of it.

He wasn’t surprised that Parris had been arrested in the COVID fraud case. “He’s already facing 20 years in prison,” he said. “What’s he worried about?”

Parris, who was charged in the case in January, grew up in Rochester, New York, and worked as an insurance agent, owned a dry cleaner and got involved in local politics. He ran unsuccessfully for city council and said he was vice president of a local African American Republican committee.

“So many people that know me, you know, trust me,” Parris said in a 2015 hearing with the Financial Industry Regulatory Authority, which later suspended his broker license.

One of Parris’ alleged victims in the Ponzi scheme, Jane Naylon, said she took guitar lessons from Parris’ father, a reverend at a local church and lost $150,000 in the fraud.

Naylon was dismayed when Parris was released on his own recognizance in the Ponzi scheme. When she learned he had been charged for PPE fraud, she said she was in shock, but also pleased.

“I’m ecstatic,” she said. “I hope he goes to jail for life.”

Parris is now jailed in Atlanta and is expected to be transferred to Washington to face charges in the VA case.

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