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.