3 Arrested Over £1.9 Million PPE Fraud Targeting US and German Firms

The National Crime Agency arrests a woman on suspicion of PPE fraud during raids in Loughborough, England, on Feb. 9, 2023. National Crime Agency

Three people have been arrested by the National Crime Agency (NCA) in England as part of an investigation into an international fraud involving personal protection equipment (PPE) during the COVID-19 pandemic.

A husband and wife—who have not been named—have been arrested in Loughborough, Leicestershire, while a third man was arrested in the Lancashire seaside resort of Lytham St. Annes.

The NCA said the man arrested in Loughborough was suspected of setting up a company that ran a fraudulent scheme allowing him to profit from the shortage of PPE, especially in the National Health Service, at the height of the COVID-19 pandemic.

The company is thought to have brokered sale agreements to supply £29 million ($35 million) worth of nitrile gloves to companies in the United States and Germany.

His wife is suspected of helping to launder money from the alleged scheme, which the NCA said may have defrauded companies out of £1.9 million ($2.35 million).

A man is arrested on suspicion of fraud by the National Crime Agency during raids in Loughborough and Lytham St. Annes, England, on Feb. 9, 2023. National Crime Agency

A 39-year-old man who was also arrested on Thursday is suspected of aiding the scheme.

Officers raided two properties in Loughborough and one in Lytham St. Annes around dawn on Thursday and seized a car, jewellery, watches, and digital devices, some of which are believed to have been bought with cash.

‘Businesses Were Impacted by Criminal Opportunists’

NCA Branch Commander Mick Pope said: “During the pandemic, both individuals and businesses were impacted by criminal opportunists. The NCA prioritised and tackled a range of serious organised crime threats, including fraud.”

He said: “False business agreements that turn out to be fraud, damage the reputation of the UK and hurt our economy. We continue to treat this as a priority area and thank Leicestershire Police for their ongoing support. Work is underway with law enforcement partners in the U.S. and Germany to further this investigation.”

The NCA believes companies wanting to buy PPE paid an upfront fee to the UK company to cover initial costs and secure the contracts, but paid into a holding account being managed by a third party.

The holding account provided assurances the money would only be released when the terms of the contract had been satisfied.

But it is alleged the couple accessed the account and withdrew money without meeting the terms of the contract.

All three suspects are being questioned and nobody has been charged.

There was a massive shortage of nitrile gloves in 2020 and early 2021 owing to the COVID-19 outbreak, which massively increased demand but also forced the biggest producer, Top Glove in Malaysia, to close down 28 factories after 2,500 workers tested positive for the virus.

In July 2020 the United States government banned the import of gloves from two of Top Glove’s subsidiaries following concerns about the conditions faced by their workers, many of whom were Nepalese migrants.

An undated image of a medical professional wearing nitrile gloves holding a syringe inserted into a COVID-19 vaccine vial. Robert Avgustin/Shutterstock

It was estimated by the U.S. International Trade Commission (USITC) that, because every COVID-19 vaccination required a new pair of gloves, in the United States alone vaccinating the entire population created a need for 660 million gloves.

Elizabeth Skokan, from the USITC, wrote a briefing in June 2021 in which she said: “There are four main types of gloves that are used in a medical and surgical context—latex, vinyl, nitrile, and gloves of other materials (e.g., neoprene or polyisoprene). Since entering the market in the early 1990s, nitrile gloves have been the preferred glove for use in the medical field.”

Nitrile Gloves Are Cheaper and Cause Fewer Allergic Reactions

Nitrile gloves cause fewer allergic reactions, are less likely to tear, and are cheaper, she said.

Skokan added: “Malaysia produced approximately 60 percent of the world’s nitrile gloves and accounted for 75 percent by quantity of non-hard rubber medical gloves, imported into the United States in 2020, with no other country holding a significant share.”

An article on Fierce Healthcare’s website in October 2020 said a survey of 905 hospitals owned by the U.S. health care company Premier Inc. found 40 percent reporting a shortage of nitrile gloves.

The president of Premier Inc., Mike Alkire, said: “There are countries that historically have never used gloves but are now using gloves. There are parts of health care infrastructure that never used gloves that are now using gloves.”

Sen. Lindsey Graham (R-S.C.) introduced a bill that would have required any supplies acquired by the Strategic National Stockpile to be made domestically.

In a letter to President Donald Trump in July 2020, Graham said, “China has laid the groundwork required to dominate the PPE market as part of their effort to maintain a grip on the global public health industrial supply chains.”