At the start of the pandemic, Massachusetts paid for 9 million face masks it then never got; now it's trying to get its money back

For starters, those were gowns, not masks.

Basically, the state wired Company A money for masks. Then, without asking or telling the state, Company A transferred the money (less a nice handling fee, of course) to newly made-up Company B (technically to a third company, also based in Wyoming, acting as a sort of transfer agent for Company B). I don't think the complaint says how the state found out, though (but I might need to read the complaint more closely).

There's a whole procurement system.

But recall what it was like in late March, 2020: Things are falling apart, we're in a state of emergency, hospitals and first responders are running out of protective gear and the federal government has just told states to screw. So in a desperate search to protect people, the state issued emergency purchase orders - which the governor's emergency declaration let it do.