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Law360, New York (May 26, 2020, 7:49 PM EDT) -- A pair of accused COVID-19 fraudsters on Tuesday denied price-gouging charges stemming from a purported scheme to resell 1 million personal protective masks at a 50% hike.
During an afternoon teleconference with U.S. Magistrate Judge Peggy Kuo, California attorney Kent Bulloch, 56, and Arizona businessman William Young Sr., 65, both pled not guilty to price-gouging conspiracy charges brought over an alleged scheme to resell KN95 masks in New York City at inflated prices.
Prosecutors say Bulloch and Young in March and April tried to lure potential investors into a ploy to sell 1 million KN95 respirator masks for double or triple the purchase price. Bulloch is further accused of cooking up an escrow agreement for one purported investor — who was actually an undercover federal agent — that falsely stated resale profits would not exceed 10%.
Attorneys for Bulloch and Young did not immediately respond to requests for comment on Tuesday. Bulloch is free on a $10,000 consent bond, while Judge Kuo on Tuesday deemed that Young could remain free without a set dollar amount attached.
Two California suppliers purportedly connected to the scheme, Donald Allen and Manuel Revolorio, are also facing wire fraud conspiracy charges.
Bulloch and Young's arraignments landed on the same day as the arrest of New Jersey used car salesman Ronald Romano, who was 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.
In another case unveiled on Tuesday, federal prosecutors charged New York pharmacist Richard Schirripa with violating the DPA by price gouging and hoarding N95 masks. Schirripa is accused of shelling out over $200,000 for N95 masks and reselling them for up to 50% more than he paid for them.
Another New York resident, Amardeep Singh, is also accused of stocking up on scarce materials including respirators and other PPE and selling the materials at a steep markup.
The cases are part of a crackdown on COVID-19 fraud by U.S. Attorney General William Barr, who has convened a nationwide task force to investigate potential fraud connected to the coronavirus outbreak.
The prosecutions came after President Donald Trump in March invoked the Defense Production Act to make it illegal to acquire scarce medical equipment in order to hoard the supplies or sell them at inflated prices.
A spokesman for the U.S. Attorney's Office for the Eastern District of New York declined to comment on the arraignments of Bulloch and Young, who are due for another court appearance, likely via teleconference, on July 15.
The government is represented by Hiral D. Mehta and Nathan D. Reilly of the U.S. Attorney's Office for the Eastern District of New York.
Bulloch is represented by Jeremy Gutman. Young is represented by Jean D. Barrett of Ruhnke & Barrett.
The case is U.S. v. Bulloch et al., case number 1:20-cr-00181, in the U.S. District Court for the Eastern District of New York.
--Editing by Amy Rowe.
For a reprint of this article, please contact reprints@law360.com.
