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Law360 (September 28, 2020, 1:56 PM EDT) -- A New York sneaker salesman who was charged with hoarding and price-gouging personal protective equipment amid the COVID-19 pandemic has agreed to donate over $400,000 worth of medical items to hospitals and health care providers as part of a deferred prosecution agreement.
In a deal signed Friday, New York federal prosecutors agreed to defer 45-year-old Brentwood resident Amardeep Singh's prosecution for two years, and Singh agreed to be supervised by the U.S. Pretrial Service Agency during that time and report to his U.S. Pretrial Services officer.
"After a thorough investigation, it has been determined that the interest of the United States and Singh's interest will best be served by deferring prosecution," the document read.
He also agreed to donate "PPE and other health and medical resources" with an approximate resale value of $455,315.90 to "hospitals, health care providers, first responders, essential workers and/or other relevant persons … involved with addressing the needs of those affected by the pandemic and working to prevent the spread of COVID-19."
If Singh successfully completes his two-year period of supervision without incident, the prosecutors said the complaint against him — which was filed in late April and contained a misdemeanor charge — would be dismissed.
The allegations against Singh were the first criminal case to invoke the Defense Production Act brought during the coronavirus pandemic. While Singh typically sold "sneakers, clothing and other apparel" from his Brentwood warehouse and Plainview storefront, the U.S. Attorney's Office for the Eastern District of New York said he stocked up on scarce personal protective equipment and sold them at inflated prices between March 15 and April 14.
Singh's sales came after President Donald Trump signed an executive order authorizing use of the Defense Production Act to secure critical medical supplies and authorizing the U.S. Health and Human Services secretary to "prevent hoarding of health and medical resources."
Singh received shipments of equipment and resources the government had deemed to be in short supply, according to prosecutors. An April search of his warehouse and store turned up 100,000 face masks, 10,000 surgical gowns, nearly 2,500 full-body isolation suits and more than 500,000 pairs of disposable gloves.
Prosecutors also said Singh's markups ranged anywhere from 59% for an N95 mask to 1,328% for three-ply disposable face masks, which he sold to "uniquely vulnerable populations" — like the Association to Benefit Children, the New York Foundation for Senior Citizens Inc. and Rewarding Environments for Adult Living Inc. Between mid-March and mid-April, Singh gained net profits of approximately $122,000 from his sales.
Singh's case was just one case in the government's crackdown against price-gouging on PPE and other medical supplies amid the pandemic. Consumers have been taking action as well against alleged price-gouging. Grocery chain Albertsons was hit with a lawsuit accusing it of increasing prices for high-demand items such as toilet paper and medical supplies, and online retail giant Amazon has faced similar allegations.
David M. Schwartz of Gerstman Schwartz LLP, counsel for Singh, told Law360 on Monday that the agreement was a "fair and amicable resolution" that would allow Singh "to move on with his life."
"He has accepted responsibility for certain mistakes he has made and is very proud of the fact that he will be donating hundreds of thousands of dollars' worth of PPE equipment to those who need it the most," Schwartz said.
Singh is represented by David M. Schwartz of Gerstman Schwartz LLP.
The U.S. is represented by Assistant U.S. Attorney Anthony Bagnuola and Acting U.S. Attorney Seth DuCharme.
The case is USA v. Singh, case number 2:20-mj-00326, in the U.S. District Court for the Eastern District of New York.
--Additional reporting by Emilie Ruscoe, Stewart Bishop, Al Barbarino and Lauren Berg. Editing by Gemma Horowitz
Update: This article has been updated with comment from Singh's counsel.
For a reprint of this article, please contact reprints@law360.com.
