Feds: Miller Place man charged with fraud in alleged $8 million pandemic PPE scheme

A Miller Place man and an upstate co-defendant were arrested Thursday and charged with fraud over accusations they stole more than $8 million from a Canadian company seeking to purchase personal protective equipment at the onset of the COVID-19 pandemic, federal prosecutors said.

Jonathan Cannon, 58, was taken into custody Thursday morning at his home in Miller Place and charged with wire fraud in a criminal complaint unsealed at the federal courthouse in Central Islip. U.S. Magistrate Judge Steven L. Tiscione released Cannon on a $500,000 bond.

Cannon’s co-defendant, Julie Dotton, 51, was arrested Thursday morning in Buffalo and also charged with wire fraud. Dotton, of upstate Orchard Park, was scheduled to be in federal court in the Western District of New York on Thursday but an update was not immediately available.

Prosecutors alleged in court filings that Cannon and Dotton misrepresented their ability to provide 12 million face masks to a Canadian company that was an official provider of PPE for two of the country's provinces during the pandemic. Dotton allegedly used an entity she controlled to enter into a contract with the company to provide the face masks for $8.2 million. The defendants failed to deliver the promised PPE, according to court records.

“As alleged in the complaint, the defendants sought to take advantage of a provider’s need for lifesaving personal protective equipment through a fraudulent scheme that was designed in reality to line their own pockets,” said U.S. Attorney for the Eastern District of New York Breon Peace in a news release.

Cannon’s attorney, Evan Sugar of the Long Island Federal Defender’s Office, did not immediately return a request for comment Thursday. It was not immediately clear if Dotton had retained an attorney.

The company wired the $8.2 million payment to a purported third-party escrow agent’s bank account, according to prosecutors’ papers. Cannon and Dotton allegedly had the purported escrow agent transfer the funds to a bank account controlled by Cannon, who then disbursed the funds to various third parties for his and Dotton’s benefit, court records show.

When the company demanded delivery of the masks or a refund of its money, the filing said, Cannon and Dotton strung them along with excuses for a number of months.

“Jonathan Cannon and Julie Dotton allegedly defrauded a health care company of approximately $8.2 million under the false pretense of selling personal protective equipment,” said James Smith, the assistant director-in-charge of the FBI’s New York field office. “The defendants’ alleged failure to provide these critical garments, especially during the onset of a global pandemic, selfishly deprived potential consumers and patients in need.”