2 Lakewood Firms Forced To Sell 11M In PPE After Price Gouging

NEWARK, NJ — Two Lakewood companies will sell 11 million personal protective equipment items at cost after they were charged with price gouging during the coronavirus pandemic, federal authorities said.

CSG Imports LLC and KG Imports LLC also have agreed to disgorge $400,000 in profits — meaning they will have to refund the money — to two customers who purchased PPE from CSG Imports at excessive prices, U.S. Attorney Craig Carpenito said.

The two companies' warehouses in Lakewood were raided in April, and more than 11 million items of PPE, predominantly N-95 respirator face masks and three-ply disposable face masks, were seized after authorities learned they were selling the items at prices that exceeded the prevailing market prices, Carpenito's office said.

Prior to the pandemic, CSG Imports had never imported PPE or health-care equipment or products of any kind. KG Imports was formed after the pandemic began specifically to import PPE into the United States, authorities said.

From March through May, CSG Imports imported and sold PPE and other health and medical resources that were federally "designated scarce materials" as prices that in some cases were almost double what they paid for them. For example, CSG Imports imported N-95 masks for a blended per-unit cost of $3.47 and sold them with markups ranging from $0.78 to $2.53. CSG Imports also imported three-ply disposable face masks for a blended per-unit cost of $0.37 and sold them with markups ranging from $0.09 to $0.28. KG Imports sold three-ply disposable face masks for a blended per-unit cost of $0.37 and sold them with markups ranging from $0.11 to $0.43.

Both CSG Imports and KG Imports entered into deferred prosecution agreements, with CSG Imports has committed to selling the seized PPE at cost and and CSG Imports must pay a minimum of $200,000 to the two customers it charged excess prices.

KG Imports has also agreed to sell the seized PPE at cost in a separate agreement, authorities said.

"The defendants in this case sought to profit illegally from a pandemic just as it was starting to sweep across the country," Carpenito said. "Today’s agreements will ensure that needed personal protective equipment gets into the hands of the people who need it, and at a fair price. We will continue to investigate these price-gouging cases with our law enforcement partners and make sure that vendors stop trying to make excess profits during this national emergency."

As part of the agreements, both CSG Imports and KG Imports agreed to continue to cooperate with the government in any ongoing or future criminal investigations during the term of their respective agreements.

Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: disaster@leo.gov

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