Law360 (November 19, 2020, 6:02 PM EST) -- The Massachusetts attorney general said her office has reached a $550,000 deal with a Maryland company that sold a hand sanitizer alternative falsely marketed as a prevention to the coronavirus pandemic to the Massachusetts Bay Transportation Authority.
Following an investigation into Federal Resources Supply Company, Attorney General Maura Healey said Wednesday she reached a deal with the company to end claims that it misled the public transit authority into ordering thousands of dollars of the product, which contained no alcohol. The attorney general had alleged the company violated the state's False Claims Act and Consumer Protection Act by promoting without adequate evidence that the product is as effective as hand sanitizer against COVID-19.
In March, the MBTA looked to buy hand sanitizer as part of its efforts to prevent COVID-19 from spreading at its facilities and contacted Federal Resources Supply after receiving a marketing email promoting "Theraworx Protect" as a product to prevent the novel coronavirus, according to the state attorney general.
Federal Resources Supply told the MBTA that the product sanitizes at "30-second flash and provides a 6 hour prolonged effect" to fight off the virus and that "if you touch something it will fight it off," according to the state attorney general.
The MBTA then made three large purchases of the product, and there's now unused product in storage, according to Healey.
According to Healey, her office learned of the company's deceptive actions and stepped in before the MBTA paid for the orders.
Under the terms of the deal, the company will take back the product from the MBTA's storage facility. It has also agreed not to market or sell the product to any state agency and to drop the representation that it is effective against COVID-19 in any marketing materials in the state, according to Healey's office.
It also agreed to pay $400,000 to the state's general fund and issue a credit of more than $150,000 to the MBTA, according to the state.
"The MBTA greatly appreciates the work of the Attorney General's Office, which held this company accountable and recovered the T's costs," MBTA general manager Steve Poftak said in a statement Wednesday. "The safety of our employees is a top priority, and it's shameful that, during a pandemic, a vendor would make false claims about a product's effectiveness."
Federal Resources Supply didn't immediately respond to a request for comment on Thursday.
Companies making allegedly false claims about COVID-19 prevention have also caught the eye of federal regulators.
In June, the Federal Trade Commission sent out yet another round of warning letters to companies hawking products, including CBD products and oral peroxide gel, with unproven claims that they can treat or prevent COVID-19. According to the agency, it has sent warning letters over COVID-19 to 250 companies and people since the pandemic started.
The state is represented by Mary-Ellen Kennedy and Amy Crafts of the Massachusetts Attorney General's Office.
Counsel information for Federal Resources Supply and case information was not immediately available on Thursday.
--Editing by Janice Carter Brown.
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