International Scams and Schemes Disrupting Global Pandemic Efforts
The coronavirus pandemic came as a shock to all across the world. Although some public health experts had warned about the potential of a large-scale epidemic lurking around, no one ever imagined an outbreak so huge that it would bring the world to a standstill. Fortunately, the pandemic has brought the best in everyone; scientists, public health experts, healthcare workers, frontline workers, and everyday citizens put all hands on deck to stem the outbreak and bring the world back to normal.
However, the pandemic has also uncovered the worst in people: scammers, racketeers, and criminal organizations have in so many ways sabotaged the global fight against the virus, exploiting pandemic-related trade activities and profiting illegally from it. Spurious individuals and groups devised schemes and means to defraud unsuspecting organizations or individuals of millions of hard-earned dollars in the guise of selling Personal Protective Equipment, vaccines, drugs, and other items.
“COVID-19 scams divert government time and resources and risk preventing front-line responders and consumers from obtaining the equipment they need to combat this pandemic,” said Former U.S. Attorney General William Barr.
A case in point is Super Antibacterial Mask Medical Material Production Joint Stock Company (SAM), a fake Vietnam-based company purported to manufacture PPEs, such as medical-grade gloves. The fraudulent company, owned and run by its ‘Chairman’ Hua Hong Hai, shipped large quantities of used gloves and condoms to customers who had made payments to receive medical-grade gloves.
With the rapid spread of the novel coronavirus, large stores of healthcare resources were getting depleted in days or weeks. Hospitals across the country were admitting hundreds of thousands of patients with severe COVID-19 illness daily, depleting resources to critically low levels. The supply of some of these equipment became crucial as cases continued to increase in their thousands every day; governments, healthcare organizations, and individuals expanded supply chains beyond local suppliers, signing contracts with manufacturers in different parts of the world to produce and provide large volumes of these hospital resources to ramp up surge capacities.
One of those ‘manufacturers’ that brokered these deals was SAM. In this company’s case, customers did not receive value for their money—and never got refunded.
Mr. Hua Hong Hai claimed to his unwary clients that he ran two FDA-registered organizations: Super Antibacterial Mask Medical Material Production Joint Stock Company with FDA number 3017084627 and Super Clean Gloves Medical Material Production Joint Stock, FDA registration number 3017909834.
Mr. Hua Hong Hai claimed that both organizations produced medical-grade nitrile gloves in large quantities and distributed them to several wholesale and retail agents across the world. Well, unknowing to his prospective clients, Mr. Hua Hong Hai neither owns nor runs a factory that produces medical nitrile gloves, and neither of those companies exists.
SAM Factory had signed contracts with several companies across the world during the pandemic, defrauding them of tens of millions of dollars. A few of the affected companies include Asther Trading in Singapore, Consiliari in Poland, and Horizon Max Global Trading in Dubai.
Mr. Hua Hong Hai worked closely with his partner, Quy Khanh Chuong, who parades himself as the Sales Manager of the factory, mediating between prospective clients and Mr. Hua Hong Hai. Mr. Chuong uses a fake name, Brain Le, for all transactions related to the company. Chuong, who is Vietnamese but with permanent residency in the US, receives a commission on each company that is defrauded.
SAM Factory had a modus operandi: after signing agreements and receiving payments, Mr. Hua Hong Hai ships used gloves and condoms to clients who do not require pre-shipment inspection of the goods. For clients that insist on pre-shipment inspection, Hai vacillates and employs delay tactics, then ultimately cancels inspection or sends falsified reports. He goes on to refuse payment refund before cutting all communication with the client.
Horizon Max General Trading LLC, one of the companies defrauded by Mr. Hua Hong Hai, submitted a criminal complaint against him to the US Department of Justice.
In an official statement, Sudheer George, the company’s director, said, “We had issued a PO to SAM and made full payment to supply 7000 cartons of Vinyl Glove brand nitrile gloves to our client in the U.S. – Albertsons (A Large US Supermarket Chain) last May 2020. SAM did not deliver the gloves on time, and after continuous and persistent follow-up, they finally shipped the consignment of 1589 CNs in August 2020. The Bill of Lading and packing list mentioned 3000 CNs of nitrile gloves, but it was full of “used vinyl gloves and condoms.”
Singapore-based medical product supplier, Asther Trading was also a victim of Mr. Hua Hong Hai’s scheme. The company made payment for $600,000 worth of medical-grade gloves and other PPEs that were never delivered. In this case, Mr. Hua Hong Hai had promised to pay Asther Trading back with the payment he was to receive from another unsuspecting client, Free Health. Immediately, Asther Trading reached out to Free health to warn the company against making any business dealings with SAM.
Shawn Z, Managing Director of Asther Trading sent the following email to Free Health:
“I have gotten your contacts from a secret source in Vietnam and I noticed that you are transferring deposits for Nitrile gloves purchased in Vietnam.
Just to caution you and give you some advice. Please do not work with "Super Anti-Bacterial mask Production Company" aka "SAM factory". We are working with the local police to arrest its director "HUA HONG HAI". We have lost more than 600k USD in past transactions in Vietnam and if I can save you from this nightmare, I would be glad not to claim back my funds.
If you wish to know more, please feel free to contact me. If you have not done so, thank god. If you have transferred, please do a recall immediately.
Mr. Hua Hong Hai made a video to Asther Trading promising to pay a refund once he receives payment from Free Health. The videos provided by Asther Trading as part of showing that SAM Factory was a fraud
Earlier in December 2020, Free Health had contacted SAM to deliver $2 million worth of medical nitrile gloves, with a delivery date of 29 January 2020. The goods were never delivered and on March 31, 2021, Mr. Hua Hong Hai, after several delay tactics, admitted to not owning or operating a factory that could manufacture medical nitrile gloves. He, however, never refunded the money.
Consiliari Partners LTD, also, in a statement noted that the company had signed a contract with SAM Gloves for delivery of nitrile examination gloves, after which it deposited an amount for the value of a 1x40ft container-load of medical grade gloves. The container that arrived in Europe was, however, filled with boxes of used vinyl gloves.
Vietnamese media was the first to run a story about SAM Factory in May 2020, after it got caught importing used gloves from China. At the time, the full scale of Mr. Hai’s criminal enterprise had not been uncovered. Less than a year later, in March 2021, Phaplaut TV/Legal News in Vietnam exposed the fraudulent activities of Mr. Hua Hong Hai and his fake medical glove factories after serial international criminal complaints had been registered against him.
Free Health and others are pursuing legal channels to recoup their stolen funds, while Hai and SAM continue to seek out unknowing international companies to lure into the trap. If you have been scammed or cheated by a company in the PPE space or by Super Antibacterial Mask Medical Material Production Joint Stock Company and Mr. Hai please email Us at firstname.lastname@example.org.