The owner of a spa in Santa Monica who amassed a large number of N95 respirator masks at the outset of the COVID-19 pandemic was sentenced on Thursday to three years' probation and hefty fines.
Niki Han Schwarz, 56, owner of Tikkun Holistic Spa, acupuncturist and reiki practitioner, reportedly sold scarce N95 masks at price points up to $15 each, a markup of over 200 percent.
In March 2020, the U.S. government designated N95 respirator masks "scarce materials" due to overwhelming need among front-line workers.
Prosecutors described Schwarz as "a small business owner from an affluent family who took advantage of the fear that gripped our nation at the beginning of the COVID-19 pandemic."
Schwarz's attorney challenged that characterization, writing in court filings that his client, the wife of a surgeon, sourced and sold hard-to-find N95 masks out of a desire to "help others." Schwarz's husband, Dr. Charles Schwarz, is an orthopedic surgeon who also acts as medical director of Tikkun Holisitc Spa.
In a YouTube video uploaded in 2010, Dr. Schwarz described the ethos of Tikkun as "to heal the world, which we attempt to do one person at a time."
Mrs. Schwarz reportedly gave a number of cloth masks away for free, and claimed any profit she made from selling N95 masks was offset by those donations. She claimed to have given away more than $20,000 worth of cloth masks to community hospitals, friends, family and front-line workers.
The spa owner eventually admitted to authorities that she obtained the N95 masks for the purpose of reselling them for profit. She "accumulated and resold the masks at prices in excess of the prevailing market prices willfully, that is, with knowledge that masks had been designated as scarce materials and with knowledge that accumulation of the designated materials to resell in excess of prevailing market prices was unlawful," her plea agreement states.
She allegedly ignored recommendations of the Centers for Disease Control that the general public not purchase or use N95 masks due scarcity. An associate reportedly warned Schwarz that she was engaging in illegal price gouging, advice she also ignored. Schwarz reportedly told that associate that wearing non-N95 cloth masks was "ridiculous," and offered no better protection than wearing nothing at all.
A U.S. magistrate judge ordered Schwarz to pay over $32,000 in restitution, as well as the maximum federal misdemeanor penalty of $100,000.
Her attorney maintained that her actions were motivated chiefly by a desire to "protect other people's health."