Various N95 respiration masks at a laboratory of 3M, that has been contracted by the U.S. government to produce extra marks in…
FILE - Several men are accused of conspiring to sell New York City 7 million 3M brand N95 respirators, which they did not possess or were not authorized to sell, for $45 million at the height of the coronavirus outbreak.

WASHINGTON - A used car salesman from the U.S. state of New Jersey has been arrested and accused of trying to sell New York City millions of desperately needed face masks at grossly inflated prices at the height of the coronavirus pandemic in March, the U.S. Justice Department announced Tuesday.  

Ronald Romano, whose dealership is about 80 kilometers south of New York City in Manalapan, New Jersey, allegedly conspired with several business associates and friends to get the city to pay more than $45 million for 7 million N95 respirators that they had not acquired and were not authorized to sell.  

Romano was charged with one count of conspiring to commit wire fraud, one count of committing wire fraud and one count of violating the anti-price gouging provisions of the Defense Protection Act. Each of the first two charges carries up to 30 years in prison.  

One of Romano’s three unidentified co-conspirators is described in court documents as a former minister of foreign investment for a European nation who purported to have expertise in international transactions and attempted to broker sales of the respirators for Romano.   

A spokesman for the U.S. Attorney’s Office for the Southern District of New York declined to comment on the co-conspirators' status or whether they remain under investigation.  

The case is the largest of its kind brought by federal prosecutors during the pandemic. In March, the Trump administration designated face masks and other medical supplies as “scarce materials” under the Defense Production Act, making it illegal to hoard and price gouge them. Shortly after President Donald Trump invoked the law, Attorney General William Barr warned hoarders that “you’ll be hearing a knock on your door.” 

“At a time when the pandemic was ravaging New York City, this defendant greedily preyed on the city’s desperate need for protective equipment to stop the spread of the virus,” Margaret Garnett, commissioner of the New York City Department of Investigation, said in a statement.

FILE - Nurses at Montefiore Medical Center Moses Division in New York hold an "urgent community speak out" demanding N95s and other critical personal protective equipment to handle the COVID-19 outbreak, April 2, 2020.

According to court documents, Romano and his co-conspirators allegedly began their “get rich quick” scheme as early as February when the coronavirus was rapidly spreading around the country, making New York City the epicenter of the pandemic the following month.    

With New York health care workers and first responders in urgent need of respirators, the men plotted to acquire large quantities of masks from suppliers in Mexico and elsewhere for resale in the United States. 

“I’m working on a few deals that if I get any of them you might be buying a Ferrari,” Romano texted a friend and business associate who allegedly took part in the scheme. 

When two brokers acting on his behalf approached city officials in March with an offer to sell 7 million N95 respirators at a markup of between 390% and 1,129%, Romano allegedly batted away an associate’s concerns about price gouging. 

“I think we are finally at a point of desperation where institutions and governments are willing to consider our pricing,” Romano texted him. 

The deal fell through only after procurement specialists for New York City contacted mask manufacturer 3M to confirm the price offer and were told that Romano was not an authorized distributor for the manufacturer.  

“Instead of reaping millions of dollars, the scheme received a dose of old-fashioned, New York City skepticism from procurement specialists,” Garnett said.  

More cases

Around the same time, Romano allegedly attempted to sell 3 million masks he had acquired from Mexico at a 500% markup to a state agency in Florida, according to court documents.   

This is the latest in a string of price gouging and hoarding cases brought by federal prosecutors in recent weeks. 

On April 24, federal prosecutors in New York charged retailer Amardeep Singh with hoarding and price gouging face masks, face shields, surgical gowns and disinfectant products in violation of the Defense Production Act. 

On April 28, federal prosecutors charged two other men with conspiracy to sell 1 million protective masks at a 50% markup.  

 

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