By Rachel O'Brien

Law360 (May 26, 2020, 5:43 PM EDT) -- A New Jersey used car salesman has been arrested and charged with running a $45 million scheme at the height of the fight against COVID-19, attempting to sell price-gouged N95 face masks to New York City, an order he had no way of fulfilling, prosecutors said Tuesday in New York federal court.

Ronald Romano, using his company in Manalapan, New Jersey, attempted to get New York City to pay a more than 400% markup on the list price of 7 million 3M brand face masks beginning in late March, a violation of the Defense Production Act, a Cold War-era law that President Donald Trump's administration has used in part to crack down on hoarding and price-gouging, the Manhattan U.S. attorney's office says in a complaint filed May 21 and unsealed Tuesday.

Romano saw the scheme as a way to get rich quickly and said to a business associate in a March 9 text message, "I'm working on a few deals that if I get any of them you might be buying a Ferrari," the government says.

When Romano quoted NYC Office of Citywide Procurement a price, he said he and his agents were legitimate personal protective equipment suppliers, but in reality he and his company had no record of selling face masks or other personal protective equipment, prosecutors say.

Romano also tried to sell Florida's Division of Emergency Management N99 face masks at an approximately 500% markup, according to the indictment.

Romano and several unnamed co-conspirators, including a former minister of foreign investment of a European nation, ran the scheme between their home states of New York, New Jersey, Pennsylvania and Florida, prosecutors say.

Romano attempted to sell the scarce face masks to other victims at markups as high as 1,100%, according to the complaint, and forged a letter from 3M Co. that said he and his company were authorized to sell them.

Romano began trying to sell 3M face masks to multiple buyers, even though he and other individuals and their companies, including an unnamed hedge fund, weren't able to procure face masks from 3M, prosecutors say.

Romano tried to sell New York City two-layer pleated masks and three-layer pleated masks while the country was facing critical shortages to help protect medical professionals and first responders battling the COVID-19 pandemic, according to the government.

On March 22, Romano sent a text message to a co-conspirator former Minister of Foreign Investment of a European nation living in New York City who attempted to broker face mask sales, stating in part, "I think we are finally at a point of desperation where institutions and governments are willing to consider our pricing," the government says.

That broker expressed shock at Romano's pricing and tried to convince him to lower prices, according to the indictment.

As NYC was considering buying from Romano, it requested references, which Romano made up and sent, according to the complaint.

Romano listed a purchasing agent for the Florida Division of Emergency Management, a naturopathic medical university and the company two co-conspirators ran, the government says. The first and third never purchased from Romano, and the second did but "those face coverings appeared to be of such inferior quality that the medical university did not distribute them," prosecutors say.

Romano is charged with one count each of wire fraud, conspiring to commit wire fraud and conspiring to violate the Defense Production Act.

"Used car salesman Ronald Romano saw the current health emergency as an opportunity to cash in, using lies and deception in what he envisioned as a get-rich-quick scheme," U.S. Attorney Geoffrey S. Berman said in a statement Tuesday.

Representatives for Romano could not be reached for comment.

3M got a preliminary injunction against Romano's Performance Supply LLC on May 4, alleging the company violated federal trademark and price-gouging law in selling its N95 masks.

Romano's attorney Mark Macron said while it's premature to comment on the detailed complaint, "I am glad that the U.S. attorney has come to an agreement on the bail package" that includes $200,000 bond, restricts Romano's travel to New Jersey and areas of New York, and requires he surrender any firearms and passports.

The DOJ didn't immediately respond to a request for comment.

The government is represented by Nicholas W. Chiuchiolo and Timothy V. Capozzi of the U.S. Attorney's Office for the Southern District of New York.

Romano is represented by Mark Macron, of Mark Macron Attorney at Law.

The case is U.S. v. Ronald Romano, case number 5:20-mj-5276 in the U.S. District Court for the Southern District of New York.

--Editing by Brian Baresch.

Update: The article has been updated with a comment from Romano's attorney.

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