3M Says Ex-Marine Faked Bill Gates Ties In Massive N95 Scam

By Craig Clough
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Law360 (June 5, 2020, 9:09 PM EDT) -- 3M filed a lawsuit in Minnesota federal court Friday accusing a former Marine of using his service record and non-existent ties to 3M and the Gates Foundation to try and trick companies into giving him billions or even trillions of dollars to purchase N95 respirators he does not have.

The Minnesota-based company is a supplier of N95 masks, and accuses Matthew Starsiak and his company AMK Energy Services LLC of approaching it with an offer to buy 900 billion respirators on behalf of the Bill & Melinda Gates Foundation, Elon Musk and Richard Branson to be donated to African populations, even though "virtually nothing" he told 3M has turned out to be true. 

According to the lawsuit, after being rejected by 3M, Starsiak quickly turned around and used the names of 3M's top lawyers, which he learned through the interaction, to bolster his credentials with other companies as a 3M distributor in an effort to perpetrate scams.

"Defendant Matthew Starsiak is a con man who trades on his military service to deceive others so he can take their money," 3M said in its lawsuit accusing Starsiak of various violations of the Lanham Act and Minnesota law.

The company added, "Let this be clear: 3M has never had any affiliation whatsoever with defendants, whose fraudulent scheme during a global pandemic represents not only a new low in rapacious profiteering, but also endangers lives by diverting buyers from legitimate sources of much-needed respirators."

Minnesota-based 3M said Starsiak approached the company in May falsely claiming to represent a consortium of wealthy individuals and charitable foundations, including the Gates Foundation, Branson and Musk, in an effort to purchase 900 billion 3M N95 respirators to donate to underserved populations in Africa.

3M said that in response to the COVID-19 pandemic, it has invested in an effort double its annual production of 1.1 billion N95 respirators, but has not raised its prices. The company noted in the lawsuit the cost of 900 billion masks would be $1.143 trillion, which is "more than thirty-six times 3M's total annual revenues" and would also "represent hundreds of years of 3M's N95 respirator production."

In a phone call with some of 3M's top lawyers, Starsiak claimed to have extensive experience in the Marines as a major who worked with the State Department, ran the "air war" in Iraq and Afghanistan for the Marine Corps, conducted the drug air war in Latin America and other parts of the world, and worked with the DEA, FBI, Department of Homeland Security and CIA, 3M said. 

"If true — and virtually nothing that has come out of Starsiak's mouth over the course of his fraudulent conduct has turned out to be true — then he repeatedly used a distinguished service record to win trust so he could to trick people into paying him for 3M N95 respirators that he does not have," 3M said.

3M said it believes Starsiak did in fact serve in the military up to 2015, but said it learned from the Gates Foundation that the charity had never heard of Starsiak or his company.

Starsiak also uses a fake New York City address on Fifth Avenue in one of the world's most expensive neighborhoods as his company's alleged headquarters when in fact it is based out of a single-family home in Utah, 3M said, adding that the zip code on AMK's website is wrong for that address and the building's superintendent has never heard of AMK.

Starsiak also has falsely claimed that his company is represented by the international law firm Dentons, 3M said.

AMK filed paperwork with the U.S. Department of Veterans Affairs claiming to have nearly 900 employees, and on its website claims to have 1,700 employees in 80 facilities around the world, 3M said.

But, the company said in its complaint, "Like nearly everything else about defendants, AMK itself appears to be a sham."

3M also claims that while Starsiak was attempting to purchase the respirators from 3M, he was also "secretly" trying to find buyers to purchase N95 respirators at between $3.85 and $4.50 each.

"To put that in perspective, if Mr. Starsiak had been able to find purchasers at that price for all the 900 billion respirators that he claimed to be purchasing for charity, his under-the-table net on those respirators would be between $2.322 and $2.907 trillion," 3M said. "Even a fraction of those respirators diverted from charitable purposes would have made Mr. Starsiak — currently working out of a one-and-a-half story house in Bountiful, Utah — a billionaire."

After he was turned down in May by 3M for the respirator deal, Starsiak turned around and represented his company to other companies as being a top distributor for 3M, according to the lawsuit. He also allegedly used the names of 3M's lawyers that he learned through his interactions with 3M to bolster his credentials with other companies, 3M said.

One company 3M said he approached is Star Brands Group, a New York-based PPE supplier, in an effort to broker another enormous respirator deal. 3M said Star Brands' leaders became suspicious of Starsiak's alleged ties to 3M and reported the interaction to a fraud hotline set up by 3M.

The lawsuit did not outline if 3M believes Starsiak has been able to broker a successful respirator deal using his allegedly phony ties to the company but did state it has reported him to federal law enforcement.

3M said is it seeking, among other things, an injunction preventing the defendants from claiming ties to 3M and for the defendants to disgorge and pay to 3M all profits derived from the sale of goods under 3M's marks, which 3M said it would donate to a COVID-19 charity. 

The company said it has filed at least 10 lawsuits in state and federal courts in its fight against fraud, price gouging and counterfeiting related to the COVID-19 pandemic.

Starsiak and 3M did not immediately respond to requests for comment.

3M is represented by Kerry L. Bundy, John W. Ursu, Peter M. Routhier, Michael M. Sawers, Isaac B. Hall, David F. Gomez and Peter W. Baldwin of Faegre Drinker Biddle & Reath LLP.

Counsel for the defendants was not immediately available.

The case is 3M Co. v. Matthew Starsiak et al., case number 0:20-cv-01314, in U.S. District Court for the District of Minnesota.

--Editing by Emily Kokoll.

For a reprint of this article, please contact reprints@law360.com.

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