Attorney General James Stops Fraudulent Broker from Selling PPE

IMPACT Medical Admits to Attempting to Sell Respirator
Masks 
It Did Not Possess and Could Not Deliver

NEW YORK – New York Attorney General Letitia James today announced an agreement that will stop a fraudulent broker of personal protective equipment (PPE) and other medical supplies from selling PPE and coronavirus disease 2019- (COVID-19) related test kits as New York and the rest of the nation continue to battle the spread of COVID-19. A proposed consent order and judgment 
— submitted to New York State Supreme Court — seeks to resolve a lawsuit brought by Attorney General James last month against Frank Borgese and his company, IMPACT Medical & Surgical Solutions (IMPACT Medical), by barring Borgese and IMPACT Medical from selling PPE and COVID-related test kits until January 2023, and only allowing them to resume the business of selling PPE thereafter if each posts a $100,000 bond. Borgese and IMPACT Medical attempted to take advantage of the desperate need for PPE at the start of the COVID-19 crisis by trying to sell governments and health care systems N95 and KN95 respirator masks which they did not have and could not deliver.

“When IMPACT Medical sold non-existent PPE, they put people’s health and lives at risk,” said Attorney General James. “This reprehensible conduct is as illegal as it is immoral. Our actions today send a message to all purported dealers: New York will not allow this type of fraud or deception to stand, and we will fight it across the nation. I urge defrauded purchasers of PPE and other COVID-related supplies to contact my office immediately, and I urge all New Yorkers to continue to follow our tips on how to avoid potential scams before purchasing PPE.”

“The COVID-19 pandemic forced New York State to mobilize unprecedented resources and develop innovative solutions to provide PPE and other supplies to essential workers of the war against this deadly virus, and it’s disgusting frankly that some companies tried to exploit that situation for their own financial gain,” Governor Cuomo said. “I applaud the Attorney General for taking decisive action to protect New York from IMPACT’s half-baked attempt to sell non-existent PPE.”

Last month, Attorney General James filed a lawsuit against Buffalo-based Borgese and IMPACT Medical, alleging the two fraudulently solicited the state of New York, as well as hospitals and health care systems across the country, with fake offers of critically-needed PPE, including 3M N95 respirator masks. In some cases, Borgese and IMPACT Medical obtained purchase orders and substantial up-front payments from hospitals and health care systems, but still failed to deliver the promised PPE and were subsequently required to make large refunds. In the lawsuit filed last month, Attorney General James requested and was granted a temporary restraining order, barring Borgese and his company from selling PPE as the COVID-19 pandemic continued.

As part of today’s proposed consent order and judgment — which is pending court approval — Borgese and IMPACT Medical admitted that neither of them is or was ever an authorized 3M distributor, that they did not possess the 3M-branded N95 respirator masks or KN95 respirator masks they advertised for sale, and that they could not meet the delivery times they provided for N95 or KN95 respirator masks. The proposed consent order and judgment also prohibits Borgese and IMPACT Medical from engaging in various deceptive or fraudulent practices in violation of Executive Law § 63(12), and bars them from selling PPE and COVID-related test kits until at least January 2023. Thereafter, Borgese and IMPACT Medical may only resume selling PPE and COVID-related test kits if they each post a $100,000 bond, and would be required to provide periodic reports to the Office of the Attorney General (OAG) with details for any orders placed by a customer for PPE or COVID-related testing kits.

The OAG wishes to thank the Office of Governor Andrew Cuomo and the New York State Office of General Services for their assistance with this case.

Attorney General James’ lawsuit against Borgese and IMPACT Medical is part of a broader investigation by the OAG into fraudulent and deceptive solicitations by sellers of PPE seeking to take advantage of the supply-chain disruptions and increased demand caused by the COVID-19 pandemic. The OAG has been working with multiple agencies within New York state and with local agencies throughout the state, as well as with private hospitals and health care systems and with large manufacturers of PPE to identify and investigate those who are engaging in fraudulent and deceptive practices to sell significant quantities of desperately-needed masks, gowns, and other coronavirus-related supplies.

Attorney General James has also issued guidance to prospective purchasers of PPE on how to avoid scammers: “Tips to Avoid COVID-19 Procurement Fraud.”

Any municipalities, hospitals, health care systems, or other large-scale purchasers of PPE and other coronavirus-related supplies that believe they have been targeted by someone charging excessive prices or using fraudulent or deceptive practices to sell COVID-19 related supplies, can report it to the OAG by calling (800) 771-7755, or by forwarding any suspicious email solicitations to the OAG at covidprocurementfraud@ag.ny.gov.

This case was handled by Assistant Attorney General David E. Farber and Senior Counsel Bryan P. Kessler, with assistance from Legal Analyst Iuliia Belyshkina — all of the Taxpayer Protection Bureau, and all under the supervision of Steven J. Glassman, Special Counsel in Economic Justice. Investigator Melissa Kaplan assisted with the investigation as well. The Taxpayer Protection Bureau is run by Bureau Chief Thomas Teige Carroll and Deputy Bureau Chief Scott Spiegelman and is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.

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