Dubai: A Dubai firm has been unwittingly caught in a multimillion dollar face mask racket allegedly orchestrated by a decorated US war hero facing charges of fraud back home.
Brian Kolfage, 38, who lost both legs and his right hand in a 2004 rocket attack in Iraq, made international headlines in August this year when he was arrested and charged by US authorities in connection with an online fund-raising campaign he founded to help build the US-Mexico border wall.
Steve Bannon, 66, the former chief strategist of US president Donald Trump and the mastermind of his 2016 election win, was also arrested for his alleged role in the fraud, as were two others — Andrew Badolato and Timothy Shea, US court documents show. They are currently on bail.
Trump has tried to distance himself from the group, but Kolfage has repeatedly bragged about their ties. Over $25 million was collected for the non-profit We Build the Wall group in 2018. US investigators said the fund-raisers lied to donors and pocketed the money.
In a 24-page indictment report seen by Gulf News, the acting US attorney, Audrey Strauss said, “The defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle.” If convicted, Kolfage could be sentenced to 20 years in prison.
But the spectre of jail hasn’t deterred the triple amputee from trying to pull off another scam, loosely modelled along similar lines. This time he’s hawking millions of protective face masks in the US, which is in the grip of a raging coronavirus pandemic that has so far claimed nearly 300,000 lives in the country.
Meanwhile, his co-accused Steve Bannon was banned by Twitter last month after he called for the beheading of top US infectious disease expert Dr Anthony Fauci and the FBI director Cristopher Fray and the posting of their head outside the White House as a warning.
In March this year, Kolfage approached Dubai-based MAMS Global Trading House on behalf of his newly formed venture, America First Medical (AFM), and placed orders for 25 million face masks worth $5.3 million (Dh19.47 million), documents exchanged between the two firms show. The first order was for 10 million masks valued at $1.5 million, including freight charges. AFM was to pay 50 per cent of the money in advance and the remaining on shipment, according to the agreement.
Once the deal was firmed, AFM wired $750,000 to MAMS CEO Mehsen Arshad in his bank account in Dubai. The money was routed through six intermediary banks. However, before the funds could reach Arshad, Kolfage disputed the transaction. Arshad said Kolfage filed a police complaint in Dubai, accusing them of fraud and tried to claw back the money — not in AFM’s account but, in a reprise of the ‘We Build the Wall’ scam — his own personal account.
Kolfage did not succeed in retrieving the money as his request was declined by the bank but his actions proved catastrophic for MAMS. Arshad, who is currently in India, said his power of attorney holder (PoA) in Dubai was arrested and all their bank accounts were frozen as a result of the police complaint against them,
Talking to Gulf News from New Delhi, Arshad said the complaint against him is unfounded. “Kolfage has alleged that I sought funds in the name of a company called Global Trading House, which has been defunct since 2018. This is not true because my company is called MAMS Global Trading House and our trade licence is valid until mid 2021. We have nothing to do with Global Trading House. I hadn’t even heard about it,” said Arshad.
On October 26, the public prosecutor in Dubai dropped criminal charges against the PoA holder who was released after spending over two weeks in jail. On November 26, the arrest order against Arshad was also revoked but his troubles appear far from over as the case against him stands and still can’t operate his bank accounts.
Gulf News has seen dozens of emails between AFM and MAMS including one from Kolfage on May 28 in which he is seeking “strategic partnership with MAMS” and looks “forward to a productive relationship in the coming days, months and years.”
“Kolfage pitched himself as a war veteran who wanted to help his country through his non-profit organisation, AFM, by procuring masks that he said were in critically short supply in the US,” recalled Arshad. “His credentials looked impressive. There were sympathetic news articles about him and pictures showing him as a guest of honour at former president Barack Obama’s State of the Union address in 2012. So we went ahead with the deal. As we scrambled to meet the first order, Kolgage kept on changing the requirements and delaying payments. At the time who would have thought all this was part of an elaborate ruse,” said Arshad.
On March 31, a Reuters investigation titled ‘The Mask Middlemen — How pop-up brokers seek big paydays in a frenzied market’ reported how Kolfage was aiming to become a mask middlemen. According to Reuters, Kolfage established AFM in February, offering to broker large-volume sales of high-grade masks known as N95s.
This was just before he approached MAMS. At that time Kolfage was charging about $4 for each mask — several times the pre-pandemic prices but a few dollars less than some hospitals and nursing homes, according to Reuters. Kolfage told the news organisation that he’s been finding masks in hidden stockpiles around the globe and hoped to collect of one per cent to three per cent per order.
Days after AFM was launched, Trump signed an executive order prohibiting hoarding and price gouging of medical supplies, and the US justice department launched a national task force to investigate such schemes.
In the indictment report against Kolfage, US prosecutors said they want to seize assets from two entities affiliated with Kolfage. One of them is America First Medical. “This perhaps explains why he wants the money in another account. I suspect he’s trying to launder his ill-gotten wealth,” alleged Arshad. “A probe could shed more light into the matter,” he said.
Kolfage did not respond to Gulf News’ emails seeking a comment but inquired how the newspaper learnt about the case.
Trump denounces Kofage’s project
President Trump has publicly denounced Kolfage’s We Build the Wall, tweeting, “I disagreed with doing this very small (tiny) section of wall, in a tricky area, by a private group which raised money by ads. It was only done to make me look bad, and perhaps it now doesn’t even work. Should have been built like rest of Wall, 500 plus miles.” Trump later told reporters that he was unaware of the project’s nefarious practices and called it “a project being done for showboating reasons”.