New York Attorney General Letitia James stopped Impact Medical & Surgical Solutions and its owner from selling nonexistent personal protective equipment (PPE) and COVID-19 related test kits.
In June, the Attorney General filed a lawsuit against Frank Borgese and his company Impact Medical & Surgical Solutions for allegedly violating New York Executive Law § 63(12) by engaging in deceptive and fraudulent solicitation of sales of PPE including N95 and KN95 respirator masks.
Borgese and Impact Medical allegedly tried to sell 3M-branded N95 respirator masks and other PPE to the State of New York as well as to hospitals/health care systems across the country including Amedisys, Baystate Health, Blessing Health, the Cleveland Clinic, Intermountain Healthcare, and Northern Light Health.
The defendants obtained purchase orders and received substantial up-front payments from hospitals and health care systems. However, they failed to deliver the PPE. As a result, Borgese and Impact Medical were required to issue large refunds, according to the Attorney General.
Last month, the New York State Supreme Court granted Attorney General James’ request for a temporary restraining order, prohibiting the defendants from selling PPE.
Proposed Consent Order and Judgment against Borgese & Impact Medical
On Tuesday, Attorney General James said her office submitted a proposed Consent Order and Judgment against Borgese and Impact Medical to the New York State Supreme Court for approval.
Under the proposed Consent Order and Judgment, Borgese and Impact Medical are prohibited from selling PPE and COVID-related test kits until January 2023. The defendants must each post a $100,000 bond before they can continue their business of selling PPE.
Additionally, the defendants are prohibited from engaging in deceptive and fraudulent business practices such as falsely claiming to be an authorized distributor and in possession of PPE or COVID-19 related testing kits.
Furthermore, the defendants are prohibited from price gouging in violation of New York General Business Law § 396-r.
Borgese and Impact Medical accepted the proposed Consent Order and Judgment against them.
New York AG will not tolerate PPE dealers engaging in deception and fraud
In a statement, Attorney General James said, “When IMPACT Medical sold non-existent PPE, they put people’s health and lives at risk. This reprehensible conduct is as illegal as it is immoral. Our actions today send a message to all purported dealers: New York will not allow this type of fraud or deception to stand, and we will fight it across the nation.”
“I urge defrauded purchasers of PPE and other COVID-related supplies to contact my office immediately, and I urge all New Yorkers to continue to follow our tips on how to avoid potential scams before purchasing PPE,” added Attorney General James.
New York Gov. Andrew Cuomo said, “It is disgusting that some companies tried to take advantage of the COVID-19 pandemic for their own financial gains.” He praised Attorney General James for “taking decisive action to protect New York” from Impact Medical’s “half-baked attempt to sell non-existent PPE.”
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