More Than Half a Million Medical Supplies Confiscated from Price Gougers

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Photo: Common Dreams

Department of Justice and Department of Health and Human Services Partner to Distribute More Than Half a Million Medical Supplies Confiscated from Price Gougers

The U.S. Department of Justice and U.S. Department of Health and Human Services (HHS) today announced the distribution of hoarded personal protective equipment (PPE), including approximately 192,000 N95 respirator masks, to those on the frontline of the novel coronavirus disease 2019 (COVID-19) response in New York and New Jersey.

According to a news release from the U.S. Department of Justice, the FBI discovered the supplies during an enforcement operation by the Department of Justice’s COVID-19 Hoarding and Price Gouging Task Force on March 30 and alerted HHS which used its authority under Defense Production Act (DPA) to order that the supplies be immediately furnished to the United States.

Officials also said, “In addition to the N95 respirator masks, the supplies found included 598,000 medical grade gloves and 130,000 surgical masks, procedure masks, N100 masks, surgical gowns, disinfectant towels, particulate filters, bottles of hand sanitizer, and bottles of spray disinfectant.”

“If you are amassing critical medical equipment for the purpose of selling it at exorbitant prices, you can expect a knock at your door,” said Attorney General William P. Barr. “The Department of Justice’s COVID-19 Hoarding and Price Gouging Task Force is working tirelessly around the clock with all our law enforcement partners to ensure that bad actors cannot illicitly profit from the COVID-19 pandemic facing our nation.”

“Cracking down on the hoarding of vital supplies allows us to distribute this material to the heroic healthcare workers on the frontlines who are most in need,” said HHS Secretary Alex Azar. “Thanks to the quick work of the White House, the Department of Justice, and HHS, the seized resources were distributed in days to the doctors, nurses and first responders who need them. President Trump’s all-of-America approach to combating the coronavirus involves an aggressive approach to stopping hoarding, and the American public can play a role by being on the lookout for this behavior.”

HHS will pay the owner of the hoarded equipment pre-COVID-19 fair market value for the supplies and has begun distributing to meet the critical need for the supplies among healthcare workers in New York and New Jersey.

Specifically, after inspecting the supplies, HHS arranged for the delivery of the PPE to the New Jersey Department of Health, the New York State Department of Health and the New York City Department of Health and Mental Hygiene.

“This is the first of many such investigations that are underway,” said Peter Navarro, DPA Policy Coordinator and Assistant to the President. “Our FBI agents and other law enforcement agencies are tracking down every tip and lead they get, and are devoting massive federal resources to this effort. All individuals and companies hoarding any of these critical supplies, or selling them at well above market prices, are hereby warned they should turn them over to local authorities or the federal government now or risk prompt seizure by the federal government.”

Vendors interested in selling PPE to the federal government should contact the Federal Emergency Management Agency at https://www.fema.gov/coronavirus/how-to-help. Anyone who learns of hoarding or price gouging of PPE should report it to the National Center for Disaster Fraud by dialing 1-866-720-5721 or emailing disaster@leo.gov.

HHS and the Federal Emergency Management Agency continue to collaborate with private industry to overcome the shortage of PPE across the country amid the COVID-19 pandemic.

The Defense Production Act and Presidential Executive Order are intended to prevent accumulation in excess of reasonable demands of business, personal, or home consumption, or for the purpose of resale at prices in excess of prevailing market prices, also known as hoarding and price gouging, of medical supplies critical to the COVID-19 response.

With COVID-19 and a State of Emergency reshaping daily life in Delaware, Attorney General Kathy Jennings reminds consumers to stay vigilant about businesses illegally raising prices to take advantage of the public’s anxiety.

“We will not tolerate preying on people’s fear and uncertainty in a public health emergency,” said Attorney General Jennings. “More than ever, we need to support one another. Exploiting a pandemic for profit is not just shameful and dangerous—it’s also illegal.”

Governor Carney’s March 12 Declaration of a State of Emergency explicitly prohibits price gouging, defined as a 10 percent or greater increase in prices above normal levels, except when the increase is attributable to increased supplier costs:

“No entity doing business in this state shall engage in price gouging as a result of this public health emergency, which shall mean an excessive price increase of goods or services offered for sale beyond the sale price in the usual course of business immediately prior to the date of this state of emergency, unless the increase is attributable to additional costs imposed on the supplier of such goods or services, such price not to increase more than 10% from the cost customarily applied in the usual course of business prior to this state of emergency. A violation of this paragraph shall be deemed an unlawful practice under § 2513 of Title 6 of the Delaware Code and a violation of Subchapter II of Chapter 25 of Title 6.”

Consumers should report suspected price gouging to the Delaware Department of Justice’s Consumer Protection Unit through a formal complaint. Consumer complaint forms can be found at de.gov/consumer and should be submitted along with any supporting documentation to consumer.protection@delaware.gov. Consumers with additional questions can contact the DOJ’s Consumer Protection Hotline at (800) 220-5424.

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