September 09, 2021
Authorities Continue Crackdown on PPE-Related Crime
Two convictions in Mississippi and New York involved theft, hoarding and price gouging.
Convictions involving PPE schemes are continuing to pile up.
Federal authorities in Mississippi and New York recently announced guilty pleas in two separate cases involving crooks exploiting the COVID-19 pandemic to try to get rich quick with illicit sales of personal protective equipment.
The cases are a reminder of the rampant criminality that has surrounded PPE during the pandemic and comes as interest in personal protective equipment is rising again in the promotional products industry amid a surge in cases attributed to the delta variant.
In the Mississippi case, Chad Paul Jacob, 54, admitted to stealing personal protective equipment, electronics and medical equipment while working as assistant chief of supply chain management for the Gulf Coast Veterans Health Care System. He then sold the stolen goods for personal profit.
During the COVID-19 pandemic, Jacob stole much-in-demand but short-in-supply N95 masks and resold them at what authorities described as “grossly inflated prices.”
Apparently, thieving was nothing new for Jacob. He began stealing VA property, including iPads and iPhones, as far back as 2009. He sold the stolen property at pawn stores and through his personal eBay account.
Authorities said that Jacob pocketed more than $50,000 from selling stolen N95 masks and over $9,000 from the iPads and iPhones.
Jacob’s guilty plea on charges of stealing government property “demonstrates our ongoing work to stop those who take advantage of public health emergencies to perpetuate such frauds,” said Special Agent in Charge Jeffrey A. Breen.
Jacob is scheduled to be sentenced on Dec. 7, 2021. He faces a maximum penalty of 10 years in prison.
In the New York case, two Long Island businessmen, brothers Allen Goldmeier and Steven Goldmeier, pleaded guilty to hoarding PPE and price gouging customers that purchased three-ply surgical masks from them, in violation of the Defense Production Act of 1950, during the pandemic.
The Goldmeiers, owners of a toy company called Millennium Products Group, leveraged their business connections in China to buy millions of three-ply surgical masks for between $0.18 and $0.60 per mask.
“Almost immediately thereafter, the defendants sold 1,227,500 of these masks to the State of Oklahoma, among others, at a price of $1.65 per mask – a markup of over 900% in many cases,” authorities said.
Authorities invoked the Defense Production Act in March of 2020. The act made it illegal to acquire medical supplies and devices designated by the Secretary of Health and Human Services as scarce in order to hoard them or sell them for excessive prices.
As part of an agreement with the government, the Goldmeier brothers will pay $1 million in restitution to the State of Oklahoma prior to sentencing. The defendants face up to one year in jail and a maximum fine of $10,000.