Texas men charged for trying to sell 50 million fake n95 masks to a foreign government

The demand for the N95 mask surely has expanded at such overwhelming rates; to the point that the supply has to be doubled each and every month due to its demand. Medical experts in the United States have projected the total number of used N95 masks to be used in the following years. In their projection, hospitals will be using around 14 million pieces of the N95 mask if the pandemic worsens.

With the efforts of the N95 mask companies to supply and meet worldwide demands, the underground market is also doing their move. There have been headlines across the United States alone about the alleged counterfeit circulation of the N95 mask. Even online, there are counterfeit versions of the N95 mask. These counterfeit versions can potentially endanger a person’s health. The counterfeit N95 mask is not regulated by the Food and Drug Administration (FDA) and the National Institute for Occupational Health and Safety (NIOSH). Meaning, these pieces of the N95 mask did not pass the standards and the requirements stipulated by the two accredited institutions.

Tuesday, November 4 – two men from Houston were charged with the attempt of selling 50 million pieces of counterfeit N95 masks. A million pieces of N95 mask were priced five times greater than its original price, which is around US$317.6 million in total.

Charged with an indictment, along with wire fraud and conspiracy, Paschal Eleanya and Areal Doolittle attempted to sell the price-gouged N95 mask pieces to an undisclosed foreign government. The N95 mask was said to be a 3M brand.

Prosecutors stated these men were to collect about US$275 million. The money was going to the alleged “broker” and the representative from the undisclosed foreign government. Breaking up the transaction before completion, the US Secret Service retrieved messages from both of the defendants.

Elena’s and Doolittle’s were sentenced up to 20 years for the two-wire fraud counts alone. Doolittle was charged last month with an attempt to defraud 21 investors in oil and gas transactions. The transactions amounted to US$1.2 million. However, Doolittle did not plead guilty.  

A similar incident happened at a Santa Monica day spa last October 13. Niki Schwarz, the owner of the spa, admitted to the authorities that she had hoarded at least 20,000 pieces of the N95 mask and sold the N95 mask way beyond the standard retail price.

She also clarified that she had done this because she was anticipating a shortage of the N95 mask. She had blown up the price with a whopping 1100% compared to the N95 mask’s original pricing. Authorities traced the original price of the N95 mask by the time Schwarz purchased them last February. It turned out, her looted pieces of the N95 mask were priced at 87 cents to $1.27 per piece. Schwarz had sold the N95 mask at an inflated price of $15 per piece.

An associate of Schwarz notified her last March 1 about illegally selling the N95 mask at an inflated price but she persevered to sell them. Schwarz had pleaded guilty to a price-gouging offense and was sentenced to a year.

With the overwhelming demand for the N95 mask, looting and price gouging for the said mask is prevalent. People looting pieces of the N95 mask for their own benefit. Some people looted the N95 mask to gain instant cash from them. From its regular pricing, the pricing for an N95 mask per piece ranges from $10 to $12; way too expensive from its original pricing.  Looting and price gouging, decrease the chance of the majority of people, mostly from the medical field, to be protected by the N95 mask.

These are the very reasons that contribute to the scarcity of the N95 mask in the market. Some sellers from across the globe have made into both local and national headlines. These sellers were reported to be hoarding stocks of N95 masks and increasing its original price for a massive profit. In connection, several lawsuits have been filed against these price gougers and hoarders of the N95 mask. They were arrested and fined. 

What does this imply to the N95 mask industry?

Primary markets of the N95 mask, like Hospitals and stores, can hardly access the N95 mask. The incidences of looting and price gouging demobilize the markets of the N95 mask. Other implications include:

  • Medical staff cannot have protection from the N95 mask. With scarce supplies of the N95 mask, medical staff’s lives are in danger.
  • Consumers of the N95 mask other than medical staff can hardly access the supply of the mask. This would also put a dent in the reputation of N95 mask supplying companies.
  • Looting and price gouging does not contribute to the economy. They in fact slow down the trade for the N95 mask. The economy remains stagnant.

With all these incidents happening, companies that manufacture the N95 mask have been in closer ties with the government. Lawsuits have been filed. Violators are fined and imprisoned. But these are not actually enough; not even the Executive Order 13910 signed by President Trump. Even tighter regulation is needed. This tighter regulation prevents future anomalistic transactions involving the N95 mask. Regulatory laws must be passed to secure the N95 mask.

These incidents highlight the idea of the N95 mask as the most essential and effective mask for protection. People should not overbuy the N95 mask and leave it to the medical personnel for consumption.

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