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TSC Agency and two partners bought 250,000 of the filtering facepiece respirators at $1.09 apiece mask from a foreign manufacturer in mid-March 2020, Acting U.S. Attorney Rachael Honig said.
TSC then sold 100,000 of the masks to the unidentified chain for $5.25 each, violating federal price-gouging laws, she said.
The logistics company – located on Lethbridge Plaza off southbound Route 17 near the State Line Diner – “had no history of selling personal protective equipment” prior to the onset of COVID-19, Honig noted.
The grocery chain, in turn, sold the masks to customers for less than it paid, while distributing some free to employees, she noted.
Rather than face trial, the company took a deal from the government, pleading guilty via videoconference Wednesday to violating the Defense Production Act, which prohibits the hoarding of materials for resale at higher than prevailing market prices.
TSC now faces possible fines in the hundreds of thousands of dollars at a sentencing scheduled for April 13, 2022 in U.S. District Court in Newark.
Honig credited special agents of the Department of Homeland Security’s Homeland Security Investigations in New York with the investigation leading to the plea, secured by Assistant U.S. Attorney David V. Simunovich of her Government Fraud Unit and Nicholas P. Grippo, chief of her Criminal Division, both in Newark.
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