Brooklyn Company Sentenced for Price Gouging KN95 Masks During COVID-19 Pandemic
For Immediate Release
U.S. Attorney's Office, District of New Jersey
NEWARK, N.J. – A New York company was sentenced today to one year of probation and fined $314,165 for its role in price gouging a chain of New Jersey grocery stores in connection with the sale of KN95 masks during the COVID-19 pandemic, U.S. Attorney Philip R. Sellinger announced.
Milk & Honey Ventures LLC (MHV), based in Brooklyn, New York, previously pleaded guilty by videoconference before U.S. Magistrate Judge Jessica S. Allen to an information charging it with price gouging in violation of the Defense Production Act.
According to documents filed in this case and statements made in court:
In March 2020, MHV and two partners purchased 250,000 KN95 filtering facepiece respirators from a foreign manufacturer. MHV and one of those partners then sold 100,000 masks to a chain of New Jersey grocery stores at prices in excess of prevailing market prices. MHV sold the masks at a price of $5.25 per mask, which amounted to a markup of more than 400 percent from its acquisition cost. Prior to the spread of COVID-19, MHV had no history of selling personal protective equipment.
U.S. Attorney Sellinger credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Ricky J. Patel in New York, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney David V. Simunovich of the Government Fraud Unit in Newark and Nicholas P. Grippo, Chief of the Criminal Division in Newark.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit: https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Updated August 10, 2022
Press Release Number: 22-295