Attorney General James Sues Purported PPE Broker for Repeated Fraud During Coronavirus Pandemic

IMPACT Medical & Surgical Solutions Attempted to Defraud New York State,

Hospitals, and Health Care Systems Across the Country

AG James Seeks Permanent Ban on Deceptive Conduct,

Restitution for All Customers, and Return of Any Profits

  New York Attorney General Letitia James filed a lawsuit against a Buffalo-area broker of personal protective equipment (PPE) and other medical supplies for repeated and widespread fraud during the coronavirus disease 2019 (COVID-19) public health crisis. The lawsuit charges Frank Borgese and his company — IMPACT Medical & Surgical Solutions (IMPACT Medical) — with fraudulently soliciting the State of New York, as well as hospitals and health care systems across the country with fake offers of critically-needed PPE, including 3M N95 respirator masks. Borgese and IMPACT Medical took advantage of the desperate need for PPE by attempting to charge governments and health care systems exorbitant prices for fake items or products they could never deliver, potentially giving Borgese and his company the opportunity to make millions in sales. 

“We won’t allow anyone to take advantage of New York State during this unprecedented moment,” said Attorney General James. “As frontline health care workers desperately searched for the proper PPE during the coronavirus pandemic, Frank Borgese and IMPACT Medical tried to profit off New Yorkers’ dire needs by selling lies. Not only did he attempt to sell products at exorbitant rates, but he did so without the ability to deliver on these attempted sales. This lawsuit should serve as a warning that we will hold anyone who tries to unlawfully profit off the coronavirus accountable.”

“The COVID-19 pandemic forced New York State to mobilize unprecedented resources and innovative solutions to provide PPE and other supplies to essential workers in need, and it’s unacceptable that some companies have tried to exploit that situation for their own financial gain,” Governor Andrew Cuomo said. “I applaud the Attorney General for taking decisive action to protect New York’s essential workers from IMPACT Medical’s half-baked attempt to sell non-existent PPE.”

As detailed in Attorney General James’ lawsuit — filed in New York County State Supreme Court — between March 2020 and May 2020, Borgese and IMPACT Medical attempted to sell 3M-branded N95 respirator masks — among other items — to the State of New York, as well as to hospitals and health care systems across the country, including Amedisys, Baystate Health, Blessing Health, the Cleveland Clinic, Intermountain Healthcare, and Northern Light Health.

In some cases, Borgese and IMPACT Medical obtained purchase orders and substantial up-front payments worth millions of dollars from hospitals and health care systems by charging prices more than four times 3M’s list prices, but still failed to deliver the promised PPE and were subsequently required to make large refunds. While promising extremely quick delivery and access to large quantities of respirator masks, Borgese and IMPACT Medical never possessed or had access to any 3M-branded N95 respirator masks, and have admitted that they never delivered a single one. And while hospitals and health care systems were ultimately refunded payments made, they were still harmed by needing to devote valuable time and precious resources into vetting illegitimate suppliers, and may have temporarily lacked the necessary funds needed to purchase critically-needed PPE from reputable suppliers.

The lawsuit lays out the fraudulent and deceptive business practices Borgese and IMPACT Medical are accused of, including:

• Falsely claiming possession of, or immediate access to, a significant quantity of 3M-branded N95 respirator masks located in the United States and falsely claiming those respirator masks were “ready to ship,”
• Misrepresenting their ability to obtain authentic 3M-branded N95 respirators masks through legitimate channels,
• Quoting quick delivery times for 3M-branded N95 respirators masks that they did not possess and could not obtain,
• Depicting a counterfeit 3M-branded N95 respirator mask on their price sheets,
• Providing an altered and deceptive test report, and
• Providing a purchaser with a fictitious reference who would then provide false information about Borgese and IMPACT Medical’s capabilities and past sales.

The Office of the Attorney General (OAG) conducted an undercover investigation during which Borgese and IMPACT Medical made additional fraudulent and deceptive representations about KN95 respirator masks (a separate mask than the N95) they were also purporting to sell, and provided a fictitious reference, who provided false information about Borgese and IMPACT Medical’s capabilities and past sales.

The lawsuit seeks restitution for affected customers and disgorgement of their profits from their fraudulent practices.

The OAG thanks the Office of Governor Andrew Cuomo and the New York State Office of General Services for their assistance with this investigation.

Attorney General James’ lawsuit against Borgese and IMPACT Medical is part of a broader investigation by the OAG into fraudulent and deceptive solicitations by sellers of PPE seeking to take advantage of the supply-chain disruptions and increased demand caused by the COVID-19 pandemic. The OAG has been working with multiple agencies within New York State and with local agencies throughout the state, as well as with private hospitals and health care systems and with large manufacturers of PPE to identify and investigate those who are engaging in fraudulent and deceptive practices to sell significant quantities of desperately-needed masks, gowns, and other coronavirus-related supplies. The OAG thanks the 3M Company, Amedisys, Baystate Health, Blessing Health, the Cleveland Clinic, Intermountain Healthcare, and Northern Light Health for their assistance in this investigation.

Attorney General James has also issued guidance to prospective purchasers of PPE on how to avoid scammers: “Tips to Avoid COVID-19 Procurement Fraud.” Any municipalities, hospitals, health care systems, or other large-scale purchasers of PPE and other coronavirus-related supplies that believe they have been targeted by someone charging excessive prices or using fraudulent or deceptive practices to sell COVID-19 related supplies can report it to the OAG by calling (800) 771-7755, or by forwarding any suspicious email solicitations to the OAG.

Separately, but related to her efforts to stop those seeking to illegally profit off the COVID-19 crisis and take advantage of New Yorkers, Attorney General James has been on the frontlines of fighting price gouging and safeguarding consumers’ wallets since the pandemic began in March. In response to more than 7,000 complaints of excessive prices related to PPE, food, and other essential consumer items that have sprung up throughout New York State in the last three months, Attorney General James has issued more than 1,565 cease-and-desist orders to businesses that stood accused of violating the state’s price gouging statute.

This past weekend, new legislation was signed into law substantially strengthening Attorney General James’ ability to go after those seeking to price gouge during an emergency. The new law expands protections against price gouging beyond just consumer goods to include any products or services that are vital or necessary to the health, safety, and welfare of consumers or the general public — extending protection against price gouging beyond only consumers to small businesses, hospitals, and other health care providers, and even the State of New York, as they purchase products or services for the benefit of the public. The law will also protect a broader scope of products and services — including medical supplies and equipment, such as ventilators — which are critically needed during the current public health crisis.

Attorney General James Announces Special Advisors in Investigation into Interactions Between NYPD and General Public

Former United States Attorney General Loretta Lynch, Founding Director of NYU

Policing Project Barry Friedman to help guide AG’s ongoing investigation

  Attorney General Letitia James announced the appointment of two special advisors to help guide and support her investigation into the recent interactions between the New York City Police Department (NYPD) and the general public. Loretta Lynch is a former United States Attorney General, and under her leadership, the Department of Justice focused extensively on improving the relationship between law enforcement and the communities they serve. Barry Friedman is the Jacob D. Fuchsberg Professor of Law at New York University (NYU) School of Law and the Founder and Faculty Director of the Policing Project at NYU Law.

“The right to peacefully protest is one of our most basic civil rights, and we are working without rest to ensure that right is protected and guarded,” said Attorney General James. “As we continue our investigation, I will continue to use every tool at my disposal to seek answers and accountability, and that includes calling on the sharpest minds to lend their expertise. There is no question that Attorney General Lynch and Professor Friedman have the experience and knowledge, and our investigation will be all the more powerful because of their support.”

During her time as the United States Attorney General, Loretta Lynch led the Department of Justice’s investigations into several large police departments to determine whether agencies and police officers were engaging in patterns or practices of unlawful conduct.

Most notably, she led the investigation into the Chicago Police Department (CPD) following the death of Laquan McDonald. That investigation found that the CPD regularly used force that was “unjustified, disproportionate and otherwise excessive,” and as a result, the DOJ issued an extensive plan for reform that included community input. Attorney General Lynch also served as the United States Attorney for the Eastern District of New York.

Barry Friedman is the Jacob D. Fuchsberg Professor of Law at NYU School of Law and the Founder and Faculty Director of the Policing Project at NYU Law. He is one of the country’s leading experts on constitutional law, criminal procedure, and policing. He is the Reporter for the American Law Institute’s “Principles of the Law: Policing,” and the author of a book and many articles on policing.

The Policing Project partners with communities and police to promote public safety through transparency, equity, and democratic engagement. The idea is that the public should have a voice in setting transparent, ethical, and effective policing policies before the police and government act, not after. Its primary areas of work are in promoting democratic voice on the front end of policing, including around policing surveillance technologies and in exploring ways to help communities address social problems without a law enforcement response, in order to reallocate resources in ways that benefit everyone.

“There is no greater responsibility of government than the protection of its citizens,” said former United States Attorney General Loretta Lynch. “It is time to examine recent events to ensure that all New Yorkers receive truly equal protection under the law. I look forward to working with Attorney General James and her outstanding team on these important issues.”

“My work is dedicated to promoting public safety through transparency, equity, and democratic engagement,” said Barry Friedman, the Jacob D. Fuchsberg Professor of Law at NYU School of Law, and the Founder and Faculty Director of the Policing Project at NYU Law. “We know that our communities are best served and protected when all stakeholders have a seat at the table, not just those in power. It’s clear New York is ready for an in-depth look at our policing polices and I appreciate the opportunity to work with Attorney General James on this investigation.”

MAYOR DE BLASIO on COVID-19 and the State of the City June 10, 2020

  Mayor Bill de Blasio: Good morning, everybody. We're in a very powerful moment in history and yesterday, a watershed moment, truly historical moment in Albany. The repeal of the 50-a law, a law that had held back transparency, and openness, had created a horrible block really, in the ability to build trust between police and community. This law was in the way for a long time. And for years I've been calling for a change. Police leaders have been calling for a change. Activists have been calling for a change. Elected officials have been calling for change. And often seemed like it was beyond our reach, but yesterday in Albany, that change happened. And that will change everything, because now there will be the ability to have the openness, the transparency, the ability to see what's really going on that I think is how you build faith and trust. So, I want to thank Majority Leader, Andrea Stewart-Cousins. I want to thank Speaker Carl Heastie. The sponsors of the legislation, Senator Jamaal Bailey, and Assembly Member Danny O'Donnell. 

So, that is such an important building block, but I want to talk today about the larger solutions. Transparency matters deeply, but the truest solutions come from the grassroots. The truest solutions come from the people. The way we're going to move forward, both in terms of safety, and peace, and justice is by the empowerment of grassroots leadership. The empowerment of organizations that authentically represent the people of our communities, that create change that government alone could never create. And that's where I want to talk about today. I want to talk about the crisis management system, the Cure Violence movement, the way that government has recognized, and I have recognized personally that if we actually invest in people, if we invest in communities, we make a change that’s much, much deeper. You're going to hear also from the leaders of the Black, Latino, Asian caucus of the City Council who have been leading the way for months now, in terms of the kinds of changes we need in this city. Who are not only demanding change, but putting forward the tangible proposals that will bring us change.

There were people in communities who were stepping up, owning their streets in a whole different way. And it was not just about the fact that they stop violence – they did, in an amazing fashion. This is a story that should be on every front page. And I hope today will help put it on the front page. A movement that stopped violence before it happened. A movement that stopped shootings, that stopped violence, that stopped people from dying. A movement that reached young people, and gave them hope. That's what I came to understand more and more, a movement that created actual grassroots leadership that could build a future. A future on the ground in community, something we have needed more and more of. I've seen it with my own eyes that this is now happening in our city, but it's happening without I think the full understanding and support that this movement, this system deserves. This is a group of human beings who made a difference. They decided to own. They decided to create. They decided to break cycles that were only hurting their own people and do something about it. It's incredibly noble. We need this movement to keep growing. Today, I'm going to announce an expansion of the crisis management system and the Cure Violence movement. We will add four additional neighborhoods – Soundview in the Bronx, Jamaica, Queens, Crown Heights, Brooklyn, and Canarsie in Brooklyn as well. With that expansion, the Cure Violence movement will now be active in 20 precincts, all 20 precincts with the highest gun violence levels in the city, that means lives will be saved, period – lives will be saved, violence will be reduced. We will also be increasing the budget for all existing crisis management system organizations. So, between these two initiatives, we will be adding in the upcoming budget over $10 million for the crisis management system, cure violence movement. This is now an additional investment on top of the tripling of resources that has been achieved since 2014. We need to bring in additional sites, additional staff, we need more and more people at the community level hired into this work to achieve peace in a way that we have now seen with our own eyes works like nothing else.

Now, everything we're dealing with against the backdrop – again, I cannot believe what the last hundred days has done to all of us, to so many families. And we grapple every day now with how we overcome that. And we’ve got to figure out, to make all other things possible, a way to finally contain this disease and then painstakingly, purposefully address the disparities one after another, after another – this has to be our constant commitment. But we first, as we do all this work, must stop the ravages of this disease. It's phase one now, and we've waited for this day, but of course this day comes with more and more people coming in, more and more contact with each other. We must keep to those standards, those rules that keep us safe, because they've gotten us this far. And then, we've got to focus on the ability to reach people and address them through test, trace, take care – test, trace, take care. I want to go over it again, because it's so important – everybody who test positive, we reach all their contacts. Anyone who needs testing, gets it. Anyone that needs to safely separate in a hotel room, gets it. Anyone needs support at home – if they're isolated from their family at home, they need food, they need medicine, they get it. It is all for free. It is an extraordinary effort. It is growing all the time, but for this to work the way we want it to, we need everyone to get a test. So, I'm reminding all New Yorkers, as you prepare, as these phases begin, as life starts back towards something better, get tested. We think about the school year ahead, I want everyone tested. As you think about going back to work, I want everyone tested. We're making it more available than ever. We had a day last week where 33,000 New Yorkers got tested on a single day. We want that number to keep growing, I want to hit 50,000 and more soon. Anyone who wants to test go to nyc.gov/covid test or call 3-1-1. We have that test for free. It's simple. It's fast. It's free.

Now, we're going to do more to make testing available to people. So, I have three announcements today. First, we have launched two mobile test trucks. They were out yesterday in Soundview, in the Bronx, at the Monroe houses. We're going to just have the trucks going around to different neighborhoods, making testing as simple and available as it possibly could be. 10 trucks will be on the ground by next month, 800 tests a day, and the more it works, the more we will do. The focus of beyond the hardest hit communities. The testing comes right to your doorstep.

Second announcement, we have six new community testing partners, and these are organizations that people trust. And we're going to start investing more and more in community-based clinics, because they have the trust of the community, the knowledge of community, they know how to reach into community, they speak the language of the community. This is a big part of what we're going to do is we build out more and more testing and more and more health care to the grassroots. There'll be 15 to 20 new sites coming in the next few weeks through community-based clinics and that will take us over 200 sites all over New York City, where people get tested for free, and that is just going to keep growing. The goal is to constantly make testing more local, more available, and I'm going to say it again – fast, easy, free.

Third point, we're going to provide the full test kits to all the hospitals and hospital systems in New York City. Any place in New York City, any place in health care that needs them, the hospitals are going to get them. Whether they are public, private, independent – if they need test kits, we will have them for them. There has been a particular request from Borough President Oddo in Staten Island to get more test kits to Staten Island immediately. We have these made in New York test kits – another one of the great innovations that came out of this crisis, creating our own here in New York City – 3,000 test kits now being sent immediately to Staten Island. We will keep resupplying tens of thousands more not in Staten Island, but all five boroughs. Whatever it takes, we're letting our health care institutions know that if they need test kits, we will have them for them, because we need testing to grow and grow and grow.

And I said, test trace, take care – let's talk about the tracers. This team now, growing all the time, over 2,500 at work now, and building. We're going to keep taking that number to 5,000 or as many as 10,000 if we need to. The biggest effort in the history of this country, right here. You heard earlier with our colleagues from the crisis management system, Cure Violence movement, that in the globe, this is the single most important place on earth for that movement. This is the place where it's supported the most. It's grown the most. When it comes to test and trace, we are going to show this nation how it can be done on a vast, vast scale. So, thousands and thousands of tracers out there right now. On Monday, June 15th, we will give you an update. The people of the city will get an update on the work of our Test and Trace Corps. So, you're going to see the sheer reach that they have been able to achieve in terms of making sure that folks get the support they need. And I always think of it this way – this is not just about testing people, it's about making sure that anyone who needs help to safely separate, gets it; anyone who needs help to isolate at home. It is about making sure that the disease doesn't spread, because people get the guidance and support to not be in a position to spread that disease. It doesn't happen accidentally. It happens with painstaking work. We will have a report on Monday, June 15th of those results.

Let's talk about today's indicators and thresholds. So first, daily number of people admitted to hospitals for suspected COVID-19 – threshold is 200. Today's report, 67 patients – well within the threshold. Daily number of people in the Health + Hospitals ICUs – that threshold, 375. Today's report, 341 – that's also well within the threshold. And percentage of people test citywide positive for COVID-19 – that threshold 15 percent. Today’s report, three percent – excellent number, also well within the threshold. So, another very good day for New York City. Let's keep focused – as we go through phase one, and it starting really well, let's keep focus of the social distancing, the face coverings, and when you don't need to be outside, don't be outside. It's working.

MAYOR DE BLASIO EXPANDS CRISIS MANAGEMENT SYSTEM AND INVESTS IN COMMUNITY-BASED SOLUTIONS TO PREVENT GUN VIOLENCE

Crisis Management System will now cover 20 precincts with highest rates of gun violence

  

Mayor Bill de Blasio  announced that the City will expand the successful anti-violence Crisis Management System (CMS) community safety program to sites in Soundview, Jamaica, Crown Heights, Flatbush and Canarsie. With this expansion, the program will now cover the 20 precincts with the highest rates of gun violence citywide. The Administration will also invest $10 million to open new sites and add program staff, building on the Administration’s commitment to reducing gun violence and strengthening neighborhood safety.

 

“The most effective solutions come from the grassroots and create change beyond the power of government,” said Mayor Bill de Blasio. “Cure Violence has empowered leaders from across our city to take control of their neighborhoods and rethink what it means to keep each other safe. What we are doing today will save lives and guarantee a safer and fairer New York for generations to come.”

With today’s announcement, CMS will expand to five additional precincts: the 43^rd Precinct in Soundview, the Bronx; 103^rd Precinct in Jamaica, Queens; 71^st Precinct in Crown Heights, Brooklyn; 69^th Precinct in Canarsie, Brooklyn; and the 70^th Precinct in Flatbush Brooklyn.

An initiative of the City’s Office of Neighborhood Safety (ONS), the Crisis Management System launched in 2017 through the Mayor’s Office of Criminal Justice as a network of providers that use the nationally recognized Cure Violence model, a neighborhood-based, public-health approach to violence reduction. CMS deploys teams of credible messengers—community members whose backgrounds allow them to connect with and motivate those at-risk—to 26 sites, where they mediate conflicts on the street and connect high-risk individuals to services These services include a year-round employment program, mental health services, and trauma counselling.

Researchers at John Jay College of Criminal Justice have found shooting victimizations fell by 28% across all CMS sites over the first 24 months following a site launch, compared to the 24 months prior to the launch. Gun injuries fell 33%. Additionally, researchers found CMS also increased trust in police and decreased residents’ reliance on violence to settle disputes.

"This City's investment in the Crisis Management System and other solutions to public safety centered on community marks a vital turning point," said Elizabeth Glazer, Director of the Mayor's Office of Criminal Justice (MOCJ). "Instead of turning first to the criminal justice system to define what safety looks like, New York City is drawing upon the strength of neighborhoods and residents themselves to drive changes for their communities to thrive."

“Public safety starts in and is sustained by the community,” said Eric Cumberbatch, Deputy Director of the Office of Neighborhood Safety. “The Crisis Management System and other vital initiatives like the Mayor's Action Plan for Neighborhood Safety tap into the grassroots, community-based networks that are led by the people who know their neighborhoods best—our residents."

News from Assemblywoman Nathalia Fernandez

Change to our Criminal Justice and Law Enforcement System

The New York State Legislature has passed vital law enforcement and criminal justice reform bills to address a much growing concern within our country.

New Laws Taking Effect – June 2020
Effective Date	Chapter	Bill Number	Summary
6/1/2020	Ch. 345 of 2019	A.8346  S.4007-A	Reduces the teacher tenure probationary period from four years to three years for school administrators moving to a new administrative position.
6/1/2020	Ch. 59 of 2020  Part J, Sec. 4	A.9509-B  S.7509-B	Eliminates the excise tax on liquors containing no more than 2 percent of alcohol by volume.
6/2/2020	Ch. 55 of 2020  Part G, Sec. 6  Subsec. 1, 4	A.9505-B  S.7505-B	Moves adolescent offenders from the Department of Corrections and Community Supervision to the Office of Children and Family Services.
6/6/2020	Ch. 758 of 2019  Ch. 55 of 2020  Subpart Y, Sec. 3	A.8083-A  S.6265-A  A.9505-B  S.7505-B	Ensures utility employees earn prevailing wages and receive homeland security training.
6/9/2020	Ch. 621 of 2019	A.754-A  S.1950-A	Requires courts to maintain data on limited English proficient litigants.
6/13/2020	Ch. 675 of 2019	A.2766-A  S.4990-A	Requires day care providers to be trained in adverse childhood experiences.
6/13/2020	Ch. 678 of 2019	A.8341  S.6524	Clarifies that enhanced training requirements for fire chiefs apply to both professional and volunteer firefighters.
6/15/2020	Ch. 681 of 2019  Ch. 55 of 2020  Subpart S, Sec. 5	A.1204-A  S.2279-A  A.9505-B  S.7505-B	Provides HIV-post exposure medical care for sexual assault victims and streamlines the process to obtain reimbursement by the Office of Victim Services.
6/16/2020	Ch. 662 of 2019  Ch. 75 of 2020	A.6962-A  S.4498-A  A.9520  S.7173	Directs the Department of Health to establish obstetric hemorrhage protocols to be implemented by hospitals and make the information available on its website.
6/17/2020	Ch. 690 of 2019  Ch. 70 of 2020	A.2566  S.4958  A.8959  S.7168	Expands eligibility for those who receive awards under crime victims' compensation to include a domestic partner and provides for out-of-pocket loss to include the cost of counseling for surviving family members of homicide victims.
6/17/2020	Ch. 706 of 2019	A.8057  S.3874-A	Authorizes the Department of Motor Vehicles to issue manufacturer license plates.
6/17/2020	Ch. 707 of 2019	A.414-A  S.4685-A	Expedites court cases in which there is an appeal to stop the disclosure of records.
6/17/2020	Ch. 708 of 2019	A.1162-A  S.4841	Authorizes physician assistants to act regarding orders to provide life sustaining treatments and orders not to resuscitate, as well as to make capacity determinations for purposes of witnessing health care proxies.
6/17/2020	Ch. 715 of 2019  Ch. 71 of 2020	A.57  S.6307  A.8975  S.7169	Requires domestic violence and sexual assault awareness education for persons engaged in the practice of nail specialty, waxing, natural hair styling, esthetics and cosmetology.
6/17/2020	Ch. 718 of 2019  Ch. 76 of 2020	A.2957-A  S.4637-A  A.9133  S.7175	Ensures that pregnant women and new mothers receive information on complications that could endanger the life or health of the newborn or mother.
6/17/2020	Ch. 721 of 2019  Ch. 55 of 2020  Subpart J, Sec. 3	A.7593  S.5958  A.9505-B  S.7505-B	Requires the Office for the Aging to establish an LGBT sexual discrimination program to train employees working with older adults.
6/20/2020	Ch. 740 of 2019  Ch. 31 of 2020	A.4751-A  S.5225-A  A.8983  S.6967	Requires a statement from a medical professional in order to obtain a driver’s license when a driver has experienced a loss of consciousness.
6/23/2020	Ch. 742 of 2019  Parts B, C, F	A.7800-A  S.6000-A	Clarifies the process of organ donation under the Uniform Anatomical Gift Act.
6/23/2020	Ch. 744 of 2019  Ch. 86 of 2020	A.2101-A  S.5679-A  A.9000  S.7307	Requires information regarding supplemental benefits paid to employees on public work contracts to be provided to the employee in their primary language.
6/30/2020	Ch. 368 of 2019	A.5874-A  S.3965-A	Establishes a pilot program for the delivery of the motor vehicle pre-licensing course via the internet.
6/30/2020	Ch. 752 of 2019  Ch. 55 of 2020  Subpart R	A.567-C  S.1826-C  A.9505-B  S.7505-B	Enacts the NY Call Center Jobs Act to prohibit state contracts and loans for companies that move jobs out of the state or country.