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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

The Attorney General's office is investigating a pop-up company it says received more than $15 million in state funds for eight million face masks, bought several million, then never delivered any of them to Massachusetts.

The US Attorney's offices in Boston and Brooklyn are also investigating the company, USiDG, LLC, according to court filings today by the Massachusetts Attorney General's office, which says the company was only incorporated on March 16, 2020 - less than a week after Gov. Baker declared a state of emergency here.

The state is asking a judge to order the company to turn over documents related to its corporate structure and the whereabouts of the masks it did buy, as the state investigates it for alleged violations of the state law that makes it illegal to lie to get state contracts.

In its filing, the state AG's office says that as Massachusetts and other states scrambled to get masks and sanitizer after the federal government made it clear it would not help them deal with the pandemic, Massachusetts issued two emergency purchase orders to an obscure broker in New Jersey called IDDC Global Brands, LLC for $16.1 million for 6 million N95 masks, at $2.50 apiece, and 2 million less protective surgical masks at 40 cents each - along with 30,000 bottles of hand sanitizer at $3.50 a bottle.

IDDC shipped the sanitizer bottles but then, unknown to the state, it turned over the mask order to USiDG, a company that had been incorporated on March 16 by Pouya Moghavem, Jae Hoon Choi and Anand Sagar Gupta in Wyoming - and it transferred $15.2 million to the new company for the mask part of the purchase orders.

State officials soon did learn about the mask maneuver, though and on April 17, 2020, demanded the Massachusetts money be returned. Instead, the state charges, over the next week, USiDG bought 6 million KN95 and 1 million surgical masks from Chinese manufacturers with Massachusetts money - but never delivered any of them here.

Last year, USiDG "donated" $18,000 to the commonwealth out of the sales of the mask, the final destination of which Massachusetts has no clue.

One set of documents the state is demanding are related to where the masks did wind up.

The Attorney General's office says it went to court only after USiDG spent several months refusing to hand over any documents until August, 2021, when it released a set of documents that failed to shed any light on what happened to the masks and the state's money. It adds the company is refusing to allow any of its founders or anybody else associated with it to sit for a formal interview with state lawyers.

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Comments

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Voting closed 8

For starters, those were gowns, not masks.

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Voting closed 13

It would be cathartic to write everything but Adam probably wouldnt put it up. I wont even type his FB page in hopes this gets posted.

Let me just say that this guy is a LIFELONG scam artist and doesnt have a pot to piss in.

Instead of getting blood from a stone, I have a MUCH better idea. WHO brought this clown to the State's attention? SPECIFICALLY, how did this obscure company with no history suddenly squeeze a fat check out of our State during a pandemic?

If I were investigating, I'd see how many people in our upper State Govt live in or near Acton and go from there. DONT. STOP. DIGGING.

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Voting closed 20

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).

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Voting closed 13

My concern is which one of Charles' friends also happens to have pull in State Government.

Who specifically vouched for him?

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Voting closed 6

of how white collar fraud is treated gently.

Oh wow, they're refusing to sit down and talk with the AG's office? Guess AG loses, then.

Meanwhile they're kicking down doors for selling cocaine.

These guys are set for life, sure they can move to many foreign jurisdictions

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Voting closed 41

OK so the procurement system is broken if we can hand massive contracts over to paper companies that literally popped up over night with no real way of tracking them.

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Voting closed 10

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.

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Voting closed 17

Wait for the next disaster and then make an end-run around the rules.

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Voting closed 7

Add in Jared stealing PPE that we bought, leading to Bob Kraft lending his plane to sneak stuff past the feds.

As I said then, you can't make this stuff up.

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Voting closed 6

...and "donate" $18k to try to clear it all up. Nice!

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Voting closed 18