PONTE VEDRA BEACH, Fla. – A Ponte Vedra Beach man has been sentenced to seven years and seven months in federal prison for running a multimillion-dollar fraud scheme that targeted investors during the COVID-19 pandemic.
James Elliott Davis II, 37, pleaded guilty to bank fraud, wire fraud, money laundering and theft of mail. The court also ordered the forfeiture of $6,726,800 — the total proceeds of Davis’ crimes — and ordered Davis to pay restitution to his victims.
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Fake medical supply company at center of scheme
According to court documents, Davis ran a purported medical supply company called Medisale Inc. from March 2018 through 2022. He used false representations to entice individuals and businesses to invest large sums of money in the company, falsely claiming Medisale was generating significant profits from the sale of COVID-19 personal protective equipment, or PPE.
Davis claimed to have relationships with hospital CEOs and said Medisale held contracts to supply hospitals with large volumes of N95 masks and other PPE. To bolster his pitch to investors, Davis showed fraudulent bank statements reflecting large account balances, which he claimed came from PPE sales.
In reality, Medisale had no such contracts and generated no legitimate revenue from PPE sales. Davis manipulated financial accounts — kiting checks and conducting fraudulent ACH and wire transfers between multiple financial institutions — to artificially inflate the apparent balances in his bank accounts. He used victim-investor money to pay off previous debts, make payments to earlier investors disguised as PPE profits and cover personal expenses.
Federal investigators, prosecutors respond
“Exploiting the fears of individuals and businesses for profit during a national crisis is untenable,” Kehoe said. “Today’s court judgment sends a clear message that this type of fraudulent behavior will not be tolerated.”
Ron Loecker, special agent in charge of IRS Criminal Investigation’s Florida Field Office, said the case reflects the severity of fraud targeting public emergencies.
“During the COVID-19 pandemic, a time when communities needed real protection, Davis chose deception,” Loecker said. “Schemes that prey on public emergencies are among the most serious frauds we investigate. IRS-CI and our partners will continue to pursue those who exploit emergencies for profit and hold them fully accountable.”