LAKEWOOD – Two companies violated the Defense Production Act of 1950 for selling 11 million items of personal protective equipment and gouging the prices, officials said.
The two companies – CSG Imports LLC and KG Imports LLC, both of Lakewood – have also agreed to disgorge $400,000 in profits relating to transactions with two customers who purchased PPE from CSG Imports at excessive prices and to compensate those customers for their losses.
“The defendants in this case sought to profit illegally from a pandemic just as it was starting to sweep across the country,” U.S. Attorney Carpenito said. “Today’s agreements will ensure that needed personal protective equipment gets into the hands of the people who need it, and at a fair price. We will continue to investigate these price-gouging cases with our law enforcement partners and make sure that vendors stop trying to make excess profits during this national emergency.”
According to the U.S. Attorney’s office, CSG Imports had never imported PPE or health care equipment prior to the pandemic. KG Imports was formed after the pandemic began to specifically import PPE.
“Profiteers who choose to shamelessly defraud the America public should know the FBI will utilize every means under the law to bring them to justice,” FBI Newark Acting Special Agent in Charge Joe Denahan said.
Law enforcement officers seized more than 11 million items on April 22, mostly face masks, police said.
CSG’s customers were often hospitals, health care providers, health care suppliers and end users, police said. They marked up N-95 masks anywhere from 78 cents to $2.53 each. They marked up three-ply disposable masks anywhere from 9 to 28 cents.
KG sold the three-ply at a mark-up of 11 to 43 cents each.
As part of the agreements, both CSG Imports and KG Imports agreed to continue to cooperate with the government in any ongoing or future criminal investigations during the term of their respective agreements.
Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by U.S. Attorney Carpenito, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs.
COVID-19 fraud, hoarding or price-gouging can be reported to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: disaster@leo.gov
