Are you a nurse, doctor, or a critical infrastructure worker? Has your supply of safety equipment – gloves and masks – been rationed by your employer because there isn’t enough to go around?
As if the mounting death toll around the world isn’t enough during the COVID-19 pandemic, there are always people who are trying to make a profit off of the dire needs of others.
In this case, it’s bathroom and cleaning supplies, gloves, masks, and hand sanitizer.
In the months before coronavirus hit the U.S., and in the first weeks of the emerging crisis, some people saw an opportunity to make money.
By being the first to buy up large quantities of the things people want and selling them back at exorbitant prices.
You might call it “retail arbitrage.” The federal government might call it “price gouging” or “profiteering.”
Examples of Price Gouging
Not everyone who hopes to make a profit from selling gloves and surgical masks is going to face federal charges.
According to a New York Times story, about two brothers who bought thousands of bottles of hand sanitizer to sell on Amazon, has a heart-warming ending.
Businesses like Amazon and eBay pulled thousands of listings for sanitizer and warned sellers they would lose their accounts if they kept selling COVID-19 related items.
Until he decided to donate the 17,000 bottles of sanitizer he had left, Matt Colvin had no idea what to do with them.
In his mind, his business was playing a key role in redistributing needed supplies to where the virus was most devastating.
However, how much of an upcharge is legal? The law is not specific, but in Michigan, price gouging is always illegal. You had better believe consumers are on high alert and ready to call it in.
Brooklyn Man Faces Federal Charges
How did a man from Brooklyn have his assets seized and distributed and get slapped with federal charges for doing the same thing?
He coughed. It has now become a federal crime to cough.
Baruch Feldheim, 43, of Brooklyn, New York purchased a large number of respirator masks, medical gloves, surgical masks, procedural masks, gowns, disinfectant spray, and other items. He is alleged to have been selling them to doctors and nurses for up to 700 times their market value.
However, let’s be clear here: Matt Colvin and his brother were doing the same thing. They were selling $1 bottles of hand sanitizer for $8. It doesn’t take much to make a 700% profit from something very cheap.
What Baruch Feldheim was arrested for was not price gouging or hoarding. He was arrested for assaulting (coughing on) and lying to federal agents about the equipment.
The news story doesn’t say that Feldheim tried to cough on a federal agent while telling him he was sick with COVID-19. In fact, the charges don’t say he did that either. They say he coughed in the direction of the federal agent.
Let’s paint an alternate picture here. Was it wise for Feldheim to try to make a profit like this?
According to the attorney general, anyone who does this is going to attract legal consequences. So, maybe it wasn’t wise. More likely, he was just unlucky.
Feldheim most likely did not try to cough on a federal agent. Most likely, his alleged statement about being sick with COVID-19 and the cough were unrelated. However, in this climate, that’s enough for agents who are determined to prevail.
Scams and profiteering are on the rise as this global crisis unfolds. Even if you are trying to make an honest profit through retail arbitrage as you have done in the past, you could attract unwanted legal ramifications.
Michigan Federal Defense Attorney
If you are facing federal charges related to hoarding and price gouging during the pandemic or any other reason, know that we are still here to fight for you. Call today for your free initial consultation.