3M files more lawsuits in Florida claiming fraud with N95 masks
The company that sells the highly sought N95 masks used to shield healthcare workers from airborne transmission of the coronavirus filed three additional lawsuits in Florida on Thursday alleging that companies in St. Petersburg, Orlando and Atlanta fraudulently claimed to be authorized 3M distributors and could allegedly supply state emergency operators with the product at inflated prices.
The lawsuits were filed against TAC2 Global of St. Petersburg, King Law Center of Orlando, and 1 Ignite Capital LLC of Atlanta, for attempting to sell the masks to the Florida Department of Emergency Management in the last month.
This makes four lawsuits filed by 3M in Florida its effort to crack down on possible profiteers attempting to take advantage of the pandemic. In the last week, the company also filed lawsuits in Indiana and Wisconsin, and has now filed a total of 10 cases in the U.S. and Canada.
“We are grateful that in each of these cases, the false offers were reported to 3M, and the attempts to deceive public officials did not succeed,” said Ivan Fong, 3M senior vice president and general counsel in a statement. “We will continue to take legal action in cases like these and are working closely with national and international law enforcement to help stop the perpetrators of these unlawful and unethical schemes.”
The companies were among dozens that attempted to sell 3M masks to state emergency managers as officials across the globe scrambled to get access to protective equipment for healthcare workers. The masks normally sell for less than $2, and 3M has not raised its prices.
The company authorizes only certain distributors to sell its product but, as demand soared, unconventional suppliers emerged to fill the void and Florida officials were willing to deal.
A Miami Herald analysis found that the state signed nearly $400 million worth of single-source, no bid deals for the masks with dozens of companies that claimed to have the 3M products, including Shark
Brands, the marketing company run by “Shark Tank” celebrity investor Daymond John, Miami real estate company Liquidus, Miami-based construction company CDR Maguire, and Miami lobbyist Manny Reyes.
The companies offered prices that ranged from $1.40 apiece from 3M distributor W.W. Grainger, to $8.95 per mask from Consolidated Disaster Services. The companies being sued by 3M to date do not include any of the purchase orders signed by the state and reviewed by the Herald.
As the Herald/Times reported, only a fraction of the 90 million masks the state sought have actually materialized, and Jared Moskowitz, the director of the state Division of Emergency Management, has said he was willing to pay the prices because the state was “desperate” to get the masks to health care workers. He also said that “many people were duped.”
3M is seeking injunctive relief to require the companies to cease illegal activities and said it will donate any damages recovered to COVID-19-related nonprofit organizations.
According to the complaints, these claims were incorporated into an email and itemized quotes provided by the companies to the emergency operations center.
“Not only does such price gouging further strain the limited resources available to combat COVID-19, but such conduct justifiably has caused public outrage which threatens imminent and irreparable harm to 3M’s brand as Defendant and similar pandemic profiteers promote an improper association between 3M’s marks and exploitative pricing behavior,’’ the complaint states.
“3M does not — and will not — tolerate individuals or entities deceptively trading off the fame and goodwill of the 3M brand and marks for personal gain. This is particularly true against those who seek to exploit the surge in demand for 3Mbrand products during the COVID-19 global pandemic, which already has claimed tens of thousands of lives worldwide and over 1,000 lives in Florida.”
The Florida cases include:
In federal court in Tallahassee, 3M sued Atlantabased 1 Ignite Capital LLC, Institutional Financial Sales LLC, and its president, Auta Lopes, for attempting to sell 10 million N95 respirators to the Florida Division of Emergency Management at nearly 460% percent over list prices, falsely claiming that it was working with 3M.
In federal court in Tampa, 3M sued St. Petersburgbased TAC2 Global LLC, for claiming to be a 3M distributor and for trying to sell DEM 5 million to 10 million N95 respirators and hand sanitizer at highly inflated prices. TAC2 falsely claimed to be a 3M supplier.
In federal court in Orlando, 3M sued King Law Center for twice pretending to be affiliated with 3M as a vendor and escrow agent and for trying to sell DEM 5 million N95 respirators at 460% over list prices.