A Houston man residing in Los Angeles has been sentenced to more than seven years in federal prison for orchestrating a $12.5 million wire fraud scheme that preyed on investors during the early months of the COVID-19 pandemic.
Robert Maxwell, 31, pleaded guilty to wire fraud on April 10. On Thursday, he was sentenced to 90 months, or seven and a half years, in prison. He will also serve three years of supervised release after completing his sentence.
Recommended Videos
OUR FIRST REPORT: Scammer admits to defrauding investors with fake COVID-19 protection products during pandemic
Maxwell was ordered to pay full restitution to his victims.
During the early months of the pandemic, Maxwell falsely claimed to investors that he had secured a manufacturing contract with a Chinese company to produce personal protective equipment (PPE), including masks and gloves. He also claimed to have a domestic agreement to sell those items.
To legitimize the scheme, Maxwell fabricated bank records, contracts, and other documents to deceive investors. He collected more than $12.5 million in investments, but neither the contract with the Chinese company nor the PPE ever existed.
In a separate COVID-related scam, Maxwell claimed he was developing an at-home aerosol product designed to “kill the coronavirus.” In reality, it was never manufactured. He told investors the product was already “flying off shelves,” but reputable retailers later told investigators they had never heard of it.
During his sentencing hearing, prosecutors revealed that Maxwell became involved in another potential fraudulent venture while awaiting sentencing, managing and attempting to sell a company in the medical clinical trial space called ClinConnect.
The court also heard evidence that Maxwell forged a letter from his former luxury apartment complex in Los Angeles and submitted it to the U.S. Probation Office in an attempt to create a false alibi while he was out on bond.
U.S. District Judge Alfred H. Bennett described Maxwell’s actions as “despicable,” citing his decision to exploit people’s fears at the height of the pandemic.
Maxwell was taken into custody immediately after the hearing and will remain detained pending transfer to a federal prison facility.