NEW ORLEANS – As hospitals overflowed and frontline workers desperately needed supplies, two individuals allegedly saw an opportunity not to help, but to line their own pockets. Frank Labruzzo and Cynthia Caronna have been slapped with federal charges of conspiracy to commit wire fraud, accused of running a scheme that preyed on the urgent demand for personal protective equipment (PPE) during the peak of the COVID-19 pandemic.
The feds allege Labruzzo, Caronna, and an accomplice based in the United Kingdom formed a business venture promising to deliver much-needed PPE. Labruzzo, a former Louisiana Attorney General’s Office investigator, played the key role of escrow agent – ostensibly guaranteeing buyers’ funds would be safe until the equipment arrived. But according to the bill of information, that’s where the truth ended. Instead of holding the money in escrow, Labruzzo allegedly diverted the funds to himself, Caronna, and other entities, leaving the buyer empty-handed and without the critical supplies they paid for.
The scheme exploited the frantic scramble for PPE in early 2020, when legitimate suppliers were overwhelmed and prices soared. The buyer, whose identity hasn’t been released, reportedly wired funds to Labruzzo’s escrow account believing it would be held secure. Instead, the feds claim, those funds vanished into a network of accounts controlled by the accused, a blatant breach of trust during a national crisis. The charges stem from Title 18, United States Code, Sections 1343 and 371 – the statutes covering wire fraud and conspiracy.
“This wasn’t a simple business disagreement; it was a calculated betrayal during a time of immense public need,” said a source close to the investigation, speaking on condition of anonymity. “People were dying, and these individuals were allegedly enriching themselves at the expense of those trying to protect lives.” If convicted, Labruzzo and Caronna face significant prison time, supervised release, and hefty fines, along with a mandatory special assessment fee.
Federal prosecutors are building their case on documented wire transfers and financial records, aiming to prove the conspiracy beyond a reasonable doubt. The FBI is leading the investigation, with Assistant U.S. Attorney Chandra Menon spearheading the prosecution. The feds are part of the COVID-19 Fraud Enforcement Task Force, a multi-agency effort dedicated to rooting out pandemic-related scams and bringing perpetrators to account.
The Task Force, established in the early days of the pandemic, has been instrumental in uncovering a wide range of fraudulent schemes, from bogus PPP loan applications to scams targeting vulnerable individuals. Citizens who suspect they’ve been victimized by COVID-19 fraud are urged to report it to the National Center for Disaster Fraud hotline. The feds are sending a clear message: exploiting a public health crisis for personal gain will not be tolerated.
Labruzzo’s background as a former investigator adds another layer of cynicism to the case. He was entrusted with a position of responsibility, and the feds allege he abused that trust for personal profit. The investigation continues, and authorities haven’t ruled out the possibility of additional charges or the involvement of other individuals.
The case serves as a stark reminder that even during a crisis, greed can rear its ugly head. And for Labruzzo and Caronna, the consequences of their alleged actions could be years behind bars.
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Key Facts
- Category: White Collar Crime
- Source: U.S. Department of Justice
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