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Rochester Man Pleads Guilty to Fraud Scheme, Sham Business to Resell Medical Equipment Defrauded Victims of more than $250,000

Publication date: 
Friday, July 24, 2020

SPRINGFIELD, Ill. – A Rochester, Ill., man, Chase Brown, 20, of the 1000 block of Heathrow Lane, today entered pleas of guilty to charges as filed for operating a medical equipment reseller business that defrauded businesses from various states of more than $250,000. Brown entered his pleas before U.S. Magistrate Judge Tom Schanzle-Haskins this afternoon. Sentencing for Brown is scheduled on Dec. 3, 2020, before U.S. District Judge Richard Mills.

Brown admitted that he established a business known as Midwest Surgical, LLC, in May 2019, purportedly to engage in the purchase and resale of medical equipment. As part of the scheme, in December 2018, Brown applied for an aviation credit card. In the application, Brown falsely stated that Midwest’s annual revenue was more than $18 million and that it employed 26 employees. After obtaining the credit card, Brown incurred more than $200,000 in charges for fuel, private charter flights and plane maintenance, including approximately $4,500 from an aviation company in Springfield, Ill.

Brown admitted that he repeatedly made false promises and representations to persons and businesses throughout the country that he would buy or sell medical equipment that he had no intention or ability to sell or purchase. After falsely representing that he would sell medical equipment, Brown used the buyers’ credit card information for personal purchases for himself and one or more of his friends but never provided the equipment to the buyer, Similarly, after falsely representing to a seller that he would purchase medical equipment, Brown provided false or fraudulent payment information, knowing that he had no intention or ability to legitimately fund the purchases.

The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General and the Springfield Police Department conducted the investigation. Assistant U.S. Attorney Timothy A. Bass represents the government in the prosecution.

At sentencing, the statutory penalty for each count of wire fraud (two counts) is up to 30 years in prison; for access device fraud, the penalty is up to 10 years in prison.  

Brown remains detained in the custody of the U.S. Marshals Service since his arrest in Florida on March 10, 2020.

Additional Details
USAO - Illinois, Central;
Federal Deposit Insurance Corporation OIG