Feds charge 2 men in plot to resell hoarded N95 masks at 50 percent markup

Feds charge 2 men in plot to resell hoarded N95 masks at 50 percent markup
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The Justice Department on Wednesday announced two men have been charged with plotting to resell 1 million KN95 protective masks in New York City at a markup.

Authorities allege that Ken Bulloch and William Young Sr. sought to resell the masks at a 50 percent markup. Bulloch created an escrow agreement for an undercover agent claiming to be an investor in which the men falsely claimed they would make no more than a 10 percent profit, according to court documents.

“As alleged, the defendants conspired to turn a huge profit from the urgent need for surgical masks in New York during the pandemic,” Richard P. Donoghue, U.S. Attorney for the Eastern District of New York, said in a statement. “When the Attorney General said that those engaged in price gouging should expect a knock on the door, he meant it and when we knock with one hand, we usually have a warrant in the other.”

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“This is precisely the type of price gouging for which Attorney General [William] Barr created our nationwide task force,” said Craig Carpenito, head of the Justice Department's nationwide COVID-19 Hoarding and Price Gouging Task Force. “The Department of Justice will not allow greedy profiteers to take advantage of the public during this health crisis.”

The announcement comes the week after Amardeep Singh, also of New York, became the first person charged with price gouging of personal protective equipment (PPE) under the 1950 Defense Production Act. Singh is accused of hoarding PPE at a warehouse in Brentwood and selling it at a markup at a retail store in Plainview.

“Unfortunately, Mr. Singh allegedly chose to use this opportunity to make money by hoarding and price gouging PPE. The conduct charged in the complaint is reprehensible and against our most fundamental American values,” Philip Bartlett, inspector in charge for the United States Postal Inspection Service's New York division, said in a statement.