#Letitia James investigates company skipping out on bulk PPE orders

#Letitia James investigates company skipping out on bulk PPE orders

June 10, 2020 | 3:29pm | Updated June 10, 2020 | 3:48pm

An Erie County business is taking pricey bulk orders for coronavirus personal protective equipment that it never delivers on, the New York Attorney General’s office is charging.

AG Letitia James wants a Manhattan Supreme Court judge to stop Frank Borgese and Impact Medical & Surgical Solutions from allegedly claiming that they have access to millions of 3M N95 masks and KN95 masks that they can quickly ship to the state of New York and hospitals and health care systems around the country.

On top of that, Impact offers to sell the masks “at prices many times higher than 3M’s list prices,” the petition filed Wednesday charges.

“In fact, neither Borgese nor Impact Medical is an authorized 3M distributor, is able to obtain 3M-branded N95 respirator masks, or has ever delivered a single 3M-branded N95 respirator mask,” the court documents claim.

Borgese has also given false information to an undercover agent from the AG’s office about the KN95 masks he was purportedly selling, the court papers allege.

In one case, Impact was allegedly paid $595,000 by home health and hospice care company Amedisys Inc. on April 2 and promised  to deliver the 3M N95 masks within three days. When nearly a week went by and the masks still hadn’t shipped, the company had to be refunded, the court documents claim.

A doctor puts on personal protective equipment (PPE)
A doctor puts on personal protective equipment.Daniel Leal-Olivas/Pool via REUTERS

At least two other medical companies encountered similar situations and had to be refunded for orders over $500,000 after Impact failed to deliver. One of these companies was left hanging for five weeks after Impact promised to deliver mask within five days, the court filings allege.

On April 21, mask maker 3M sent a cease-and-desist letter to Impact for price gouging and falsely claiming to have an association with 3M, the court papers claim.

Impact also lied to an undercover agent from the AG’s office about the types of KN95 masks it had and gave the agent a false reference of a previous buyer who was actually a relative of one of Borgese’s business partners, the court documents allege.

“Respondents are continuing to use fraudulent and deceptive business credit card fraud practices to solicit the sales of KN95 respirator masks and other PPE,” the petition claims.

The AG’s office wants Impact’s records and financials to see if other victims have been defrauded and the AG wants Impact to pay restitution to all its victims.

The office also wants Borgese and Impact to pay a $2 million bond to ensure they comply with any injunction the court may order, which would also be used as a restitution fund for victims.

Borgese declined to comment.


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