NEW YORK (1010 WINS) — A Brooklyn company has been sentenced after admitting to price gouging KN95 masks to a New Jersey grocery chain at the start of the COVID-19 pandemic, the U.S. Attorney's Office said Tuesday.
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Milk & Honey Ventures LLC, or MHV, will face a year of probation and a $314,165 fine after pleading guilty in March to price gouging the then highly desired KN95 masks at an over 400% markup, in violation of the Defense Production Act.
According to court statements and documents, MHV and two unnamed partners bought 250,000 KN95 filtering face mask respirators from a foreign manufacturer.
MHV purchased the masks just a day before then-President Donald Trump signed a March 18, 2020, executive order, which among other aspects, leveraged a 1950 statute that forbids price gouging and hoarding in times of national crisis, according to the criminal complaint reviewed by NorthJersey.com.
The company and one of those partners then sold 100,000 masks to the New Jersey grocery chain at a price of $5.25 per mask, while each mask reportedly cost the company and its partners $1.09.
The unnamed supermarket chain also took a loss in the scheme by providing employees' masks for free and selling them to shoppers for less than they were purchased by MHV, the complaint alleged.
Prior to the spread of COVID-19, MHV had no history of selling personal protective equipment, the Justice Department said.
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