Man indicted after operating fraudulent medical supplies business

News

SPRINGFIELD, Ill. (WCIA) — A Rochester man was indicted by a grand jury on fraud charges after being accused of defrauding victims using a medical equipment reseller businesses.

Officials said 20-year-old Chase Brown was indicted on the charges after defrauding several businesses around the country of more than $250,000. He was arrested in March in the Middle District of Florida. He made an initial federal court appearance in Tampa before being transferred to Illinois.

Brown is accused of establishing “Midwest Surgical, LLC” to buy and resell medical equipment. As part of the scheme, he applied for an aviation credit card. Officials said in his application, he “falsely stated that Midwest’s annual revenue was more that $18 million and that it employed 26 employee.” He then used the credit car to incur more than $200,000 in charges. Officials said it was for gas, private charter flights and plane maintenance. It also included $4,500 from an aviation company in Springfield.

Brown is accused of making fraudulent promises to people around the country that he would buy/sell medical equipment. He would use the buyers’ credit card information to buy items for himself or his friends. He had no intention of providing the equipment.

Brown is also accused of representing himself as a buyer to sellers while not planning to legitimately pay for the purchases. For example, officials said Brown allegedly entered into a “consignment agreement” with an Illinois hospital to liquidate their equipment. He was required to make two $375,000 payments to the hospital. After receiving the equipment, his $375,000 check bounced and he falsified that he submitted a $375,000 wire transfer. Officials said that transfer did not take place.

They said Brown eventually returned most of the equipment but kept $10,000 worth of equipment without making a payment.

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