A no longer cocky man who thought he could get away with overcharging desperate hospitals for N95 masks in the spring of 2020 on the mistaken belief that was at worst a civil infraction, has agreed to plead guilty to the criminal offense of conspiracy to commit price gouging in violation of the Defense Production Act, the US Attorney's office in Boston reports.
According to an "information" unsealed yesterday in US District Court in Boston, Jason Colantuoni, 35, of Norfolk conspired with two Florida men who were longtime friends to round up as many N95 masks as they could - sometimes through eBay bids - in March and April, 2020, then sell them at dramatically higher prices to hospitals, through the company one of the Florida men set up specifically to resell masks.
Federal investigators first began looking into Colantuoni and the two other, unnamed, men, when a Massachusetts hospital buyer contacted somebody in law enforcement to complain the trio wanted $5.50 per mask in a bulk purchase, compared to the roughly 53 cents per mask the hospital had paid before March, 2020.
The feds say that another person they brought in warned the trio they were overcharging for masks and that law enforcement was looking at possible Covid-19 price gouging.
"You gotta be careful man" because "a friend talked to a person he knows at the fbi" and "[t]hey are going to audit every transaction." Individual-1 and Individual-2 dismissed the warnings and Individual-3 responded: "Yes they are letting it go because people are dying / But they will jail or heavily fine people." Colantuoni replied " 'Price gouging' is open for interpretation. And it isn't a crime lol / It's a civil fine." Colantuoni added: "Companies are responsible for hundreds of deaths in some cases and not 1 person goes to jail for 1 second."
Unfortunately for the jocular Norfolk man, he appeared not to have noticed that on March 18 and March 23, 2020, President Trump signed executive orders invoking the Defense Production Act, which gave the government the right to oversee civilian markets critical to the national defense and prevent hoarding and price gouging - in this case, medical supplies related to fighting Covid-19, at a time when hospitals and first responders were running short of personal protective equipment and there were no effective drugs or vaccines against the virus. On March 25, the Department of Health and Human Services issued a list of 15 specific items it would be regulating, including N95 masks.
So what Colantuoni and his friends were allegedly doing was, in fact, a criminal act.
According to the feds, the three ultimately obtained roughly 1,000 boxes of masks, with 20 to 30 masks in a box, at an average price of $4.48 per mask, then promptly resold them to Massachusetts and other hospitals at $9.91 a mask.
Colantuoni faces up to a year in federal prison, plus a year on probation and a $10,000 fine, although in the calculation a judge will perform to determine his sentence, he will get points for having admitted his guilt.
Sentencing has yet to be scheduled.