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Date: 05-27-2020
Case Style:
United States of America v. Richard Schirripa, a/k/a "the Mask Man"
Case Number:
Judge: Ona T. Wang
Court: United States District Court for the Southern District of New York (New York County)
Plaintiff's Attorney: United States District Attorney’s Office
Defendant's Attorney:
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New York, NY The United States of America charged Richard Schirripa, a/k/a "the Mask Man" with violation of the Defense Production Act.
RICHARD SCHIRRIPA, a/k/a “the Mask Man,” a licensed pharmacist, was arrested on charges of violating the Defense Production Act by hoarding and price gouging scarce N95 masks; making two false statements to law enforcement; committing healthcare fraud; and committing aggravated identity theft.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Richard Schirripa exploited an unprecedented crisis to engage in profiteering. He allegedly spent over $200,000 accumulating N95 masks and then sold masks at inflated prices, charging customers up to 50% more than he had paid to acquire those N95 masks. As alleged, during a sale to an undercover officer, Schirripa said, ‘I feel like a drug dealer.’ He also allegedly committed several additional, unrelated crimes, including lying to law enforcement, defrauding Medicare and Medicaid, and exploiting the personal information of his pharmacy’s customers to fill prescriptions.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “At this time when our nation is battling the COVID-19 pandemic and we expect that our healthcare professionals are standing in solidarity with us, the defendant, Richard Schirripa, a licensed pharmacist, allegedly sought to capitalize and profit from the suffering of others. As the pandemic was starting to take shape in March and April of 2020, Schirripa allegedly began hoarding desperately needed Personal Protection Equipment (PPE). As demand for the PPE was peaking, he then purportedly took the opportunity to sell the hoarded PPE at prices as much as 50% above his acquisition costs. HSI, along with law enforcement partners, and the United States Attorney’s Office, Southern District of New York, will tirelessly pursue those in our society who choose to put their personal greed and gain ahead of the laws of the United States and our fellow citizens.”
USPIS Inspector in Charge Philip R. Bartlett said: “As alleged, Mr. Schirripa chose to amass a stockpile of PPE, specifically N95 masks, which were desperately needed for the safety of frontline workers. He then allegedly used this crisis to jack up the price of this equipment. Thankfully, the ‘mask man’ has been unmasked by law enforcement and brought to justice for his alleged greedy crimes.”
DEA Special Agent in Charge Raymond Donovan said: “There is no place in our city for a licensed pharmacist to allegedly victimize New Yorkers, especially at a time when people’s priority is their health and safety. I applaud our law enforcement partners for their collaborative efforts throughout this investigation.”
According to the allegations in the Complaint unsealed today[1]:
SCHIRRIPA engaged in at least three different criminal schemes: (1) hoarding and price gouging of thousands of N95 masks in late March and April 2020, in violation of the Defense Production Act (“DPA”); (2) lying to officers of the Drug Enforcement Administration (“DEA”) on two occasions in early 2020; and (3) causing Medicare and Medicaid to be billed for prescriptions based on false representations, from 2014 to 2019, as well as using his pharmacy patients’ identifying information, without authorization, in connection with his health care fraud scheme.
As for the first scheme, from at least late March to April 2020, during the COVID-19 global pandemic, SCHIRRIPA engaged in hoarding and price gouging of thousands of 3M N95 masks. Between February and April 8, 2020, SCHIRRIPA purchased at least approximately $200,000 worth of N95 masks. On March 25, 2020, the DPA was invoked, making it a crime to engage in hoarding or price gouging of specified equipment, including the types of masks SCHIRRIPA had. SCHIRRIPA admitted to law enforcement that he was aware of the DPA and its restrictions on price gouging and hoarding. Nevertheless, in the two weeks after March 25, 2020, SCHIRRIPA (1) continued to add to his stockpile of N95 masks by buying thousands of additional N95 masks; and (2) charged his customers inflated prices in connection with at least approximately 50 sales that, together, yielded approximately $50,000 in sales revenue. For instance, SCHIRRIPA charged up to $25 per mask for a mask that he purchased for $20 per mask and that generally costs an end-user only approximately $1.27, according to 3M, the manufacturer. Moreover, SCHIRRIPA purchased another model of 3M N95 mask for $10 and repeatedly resold it for as much as $15, which constitutes a markup of 50%. His customers were in eight states and included funeral homes and doctors. Agents recovered approximately 6,660 masks from SCHIRRIPA.
SCHIRRIPA made various statements during this scheme. During a recorded call with an undercover agent (the “UC”), SCHIRRIPA said, “We’re in a time of emergency and shortage,” but added, “when you have something no one else has, it’s not a high price.” In a text message dated April 2, 2020, SCHIRRIPA bragged to a potential customer that he “saw it coming” and the “good thing is no one has them.” SCHIRRIPA repeatedly sold masks out of his car, including to the UC; during that sale, SCHIRRIPA told the UC, “I feel like a drug dealer standing out here.”
Second, in both January and February 2020, SCHIRRIPA made material false statements to the DEA. On each occasion, SCHIRRIPA falsely represented that as part of the recent closure of his pharmacy in New York, New York, he had transferred to others, sold, or destroyed all controlled substances. In fact, SCHIRRIPA remained in possession of thousands of controlled substance pills/patches, including fentanyl, oxycodone, and oxymorphone. These substances were all recovered from a safe in SCHIRRIPA’s home. When agents executed a search warrant at SCHIRRIPA’s home in April 2020, SCHIRRIPA acknowledged that these controlled substances were from his pharmacy and he needed to destroy them. There were nearly 4,000 pills/patches, in total.
Third, SCHIRRIPA caused Medicare and Medicaid to be billed for these controlled substance prescriptions, and he falsely represented that these prescriptions were for patients of his pharmacy. In fact, these prescriptions were not for patients of his pharmacy, and SCHIRRIPA himself possessed those prescriptions at his home on Long Island. In connection with this scheme, SCHIRRIPA used the personal identifying information of his pharmacy’s patients, without their authorization.
* * *
SCHIRRIPA, 66, of Fort Salonga, New York, is charged with one count of violating the Defense Production Act, which carries a maximum sentence of one year in prison; two counts of making false statements, each of which carries a maximum sentence of five years in prison; one count of healthcare fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison, which must run consecutively to any other sentence of imprisonment.
Mr. Berman praised the outstanding investigative work of HSI-NY, working in conjunction with the U.S. Postal Inspection Service, the DEA, the New York City Police Department, U.S. Customs and Border Protection, the Internal Revenue Service, and the Port Authority Police Department. He also expressed gratitude to the U.S. Department of Health and Human Services, the New York State Department of Corrections and Community Supervision, and the Northvale, New Jersey, Police Department. He noted that the investigation is ongoing.
Mr. Berman thanked the Department of Justice’s COVID-19 Hoarding and Price Gouging Task Force. Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, United States Attorney for District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Michael D. Neff is in charge of the prosecution.
Sec. 2. DECLARATION OF POLICY [50 U.S.C. App. § 2062]
(a) Findings
Congress finds that—
(1) the security of the United States is dependent on the ability of the domestic
industrial base to supply materials and services for the national defense and to prepare for and
respond to military conflicts, natural or man-caused disasters, or acts of terrorism within the
United States;
(2) to ensure the vitality of the domestic industrial base, actions are needed—
(A) to promote industrial resources preparedness in the event of domestic or
foreign threats to the security of the United States;
(B) to support continuing improvements in industrial efficiency and
responsiveness;
(C) to provide for the protection and restoration of domestic critical
infrastructure operations under emergency conditions; and
(D) to respond to actions taken outside of the United States that could result in
reduced supplies of strategic and critical materials, including energy, necessary for national
defense and the general economic well-being of the United States;
(3) in order to provide for the national security, the national defense preparedness
effort of the United States Government requires—
(A) preparedness programs to respond to both domestic emergencies and
international threats to national defense;
(B) measures to improve the domestic industrial base for national defense;
(C) the development of domestic productive capacity to meet—
(i) essential national defense needs that can result from emergency conditions;
and
(ii) unique technological requirements; and
2
(D) the diversion of certain materials and facilities from ordinary use to national
defense purposes, when national defense needs cannot otherwise be satisfied in a timely
fashion;
(4) to meet the requirements referred to in this subsection, this Act [50 U.S.C. App. §
2061-2171] provides the President with an array of authorities to shape national defense
preparedness programs and to take appropriate steps to maintain and enhance the domestic
industrial base;
(5) in order to ensure national defense preparedness, it is necessary and appropriate to
assure the availability of domestic energy supplies for national defense needs;
(6) to further assure the adequate maintenance of the domestic industrial base, to the
maximum extent possible, domestic energy supplies should be augmented through reliance on
renewable energy sources (including solar, geothermal, wind, and biomass sources), more
efficient energy storage and distribution technologies, and energy conservation measures;
(7) much of the industrial capacity that is relied upon by United States Government for
military production and other national defense purposes is deeply and directly influenced
by—
(A) the overall competitiveness of the industrial economy of the United States; and
(B) the ability of industries in the United States, in general, to produce
internationally competitive products and operate profitably while maintaining adequate
research and development to preserve competitiveness with respect to military and civilian
production; and
(8) the inability of industries in the United States, especially smaller subcontractors
and suppliers, to provide vital parts and components and other materials would impair the
ability to sustain the Armed Forces of the United States in combat for longer than a short
period.
(b) Statement of Policy
It is the policy of the United States that—
(1) to ensure the adequacy of productive capacity and supply, Federal departments and
agencies that are responsible for national defense acquisition should continuously assess the
capability of the domestic industrial base to satisfy production requirements under both
peacetime and emergency conditions, specifically evaluating the availability of adequate
production sources, including subcontractors and suppliers, materials, skilled labor, and
professional and technical personnel;
3
(2) every effort should be made to foster cooperation between the defense and
commercial sectors for research and development and for acquisition of materials,
components, and equipment;
(3) plans and programs to carry out the purposes of this Act [50 U.S.C. App. § 2061-
2171] should be undertaken with due consideration for promoting efficiency and competition;
(4) in providing United States Government financial assistance under this Act [50
U.S.C. App. § 2061-2171] to correct a domestic industrial base shortfall, the President should
give consideration to the creation or maintenance of production sources that will remain
economically viable after such assistance has ended;
(5) authorities under this Act [50 U.S.C. App. § 2061-2171] should be used to reduce
the vulnerability of the United States to terrorist attacks, and to minimize the damage and
assist in the recovery from terrorist attacks that occur in the United States;
(6) in order to ensure productive capacity in the event of an attack on the United
States, the United States Government should encourage the geographic dispersal of industrial
facilities in the United States to discourage the concentration of such productive facilities
within limited geographic areas that are vulnerable to attack by an enemy of the United States;
(7) to ensure that essential national defense requirements are met, consideration should
be given to stockpiling strategic materials, to the extent that such stockpiling is economical
and feasible; and
(8) in the construction of any industrial facility owned by the United States
Government, in the rendition of any financial assistance by the United States Government for
the construction, expansion, or improvement of any industrial facility, and in the production
of goods and services, under this Act [50 U.S.C. App. § 2061-2171] or any other provision of
law, each department and agency of the United States Government should apply, under the
coordination of the Federal Emergency Management Agency, when practicable and consistent
with existing law and the desirability for maintaining a sound economy, the principle of
geographic dispersal of such facilities in the interest of national defense.
Outcome: The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Plaintiff's Experts:
Defendant's Experts:
Comments: