Everyone Is Trying to Sell Medical Equipment—Even on LinkedIn
In early April, he wrote a diatribe on LinkedIn about users who suggested he was on the wrong side of the law. “We are in contact with the Department of Justice and in line with all of their guidelines regarding price gouging so anyone who wants to call me out can go fucks [sic] themselves and they will have a lawsuit sent to their address certified mail,” he wrote. When I asked him about his compliance on WhatsApp, he told me that one of his partners had been in touch with a “government entity” regarding price-gouging guidelines.
After I brought the profiles of several individuals to the company’s attention, LinkedIn said it would restrict them. As of Thursday, though, a search for “N95” still brought up PPE brokers.
Two weeks into my quest for PPE, a contact who works in sourcing forwarded me a video that was circulating on WeChat, the Chinese social media and messaging app. In it, the camera pans across stacks of cardboard boxes in a warehouse in Toms River, New Jersey, and a man says they contain three-ply surgical masks. “We have 500,000 units for Jay Avigdor, ready to ship,” he says. He zooms in on an open carton, which is printed on one side with the Food and Drug Administration’s logo. “As you can see, the FDA approval.”
The week before, Avigdor had posted a request on LinkedIn. He needed N95 respirators. “If you have in stock, or know anyone who does, please message me! Looking to fill a very large order!” Avigdor is the CEO of a company on Long Island called Velocity Capital Group, which gives loans to small businesses. When I called him, he said that his business had pivoted to supplying PPE during the wider economic shutdown: “There’s no one that’s not hurting. I haven’t heard one person say that this is the best time of year for them—unless you’re in the medical supply business.”
Avigdor told me that he had located suppliers in China, India, and Mexico, but some clients requested inventory that was already in the United States. He had gone on LinkedIn seeking a local source for N95s. His post invited replies from a dealer based in Mumbai who elsewhere on LinkedIn claimed to have 30 million of the respirators in the United States and a digital marketer whose profile photo showed him shirtless. Avigdor said he purchases from separate reputable suppliers. He said he sells to hospitals, nursing homes, and corporate clients, never to redistributors, and that he typically earns a profit of 5 to 10 cents per surgical mask. He added that he recently donated roughly 70,000 surgical masks to a local nursing home and first responders.
It can be difficult to distinguish helpful brokers from speculators. Some sellers on LinkedIn claim to have warehouses filled with millions of 1860 or 8210 model N95 respirators at prices ranging from $5.10 to $6.60 a piece. 3M distributors sell these same models for $1.02 to $1.31, according to a 3M document initially released on March 31 and meant to discourage price-gouging. Last Friday, 3M sued a New Jersey company called Performance Supply LLC, claiming it had falsely said it was an agent of the manufacturer. Performance Supply allegedly offered millions of N95 respirators to the city of New York for up to $6.35 each—a deal worth $45 million. “[U]nsavory characters continue their quests to take advantage of health care workers, first responders, and others in a time of need and trade off the fame of the 3M brand and marks,” the lawsuit alleges. Performance Supply could not be reached for comment.
On March 25, the Department of Health and Human Services issued a notice forbidding hoarding or price-gouging with 15 types of PPE. Both 3M and the Justice Department have set up price-gouging hotlines, and the feds have begun to make arrests. “If you are amassing critical medical equipment for the purpose of selling it at exorbitant prices, you can expect a knock at your door,” attorney general William Barr said in a press release. Four days after the HHS notice was issued, FBI agents showed up outside the Brooklyn home of Baruch Feldheim, who had in his possession 192,000 N95 respirators, 130,000 surgical masks, and 598,000 medical-grade gloves. The authorities said Feldheim had charged a doctor $12,000 for an assortment of PPE—an approximately 700 percent markup from the normal price. When the agents explained that they wanted to stay a safe distance away from him, Feldheim allegedly coughed without covering his mouth and told them that he had Covid-19, according to the complaint filed in US district court in New Jersey. Feldheim’s lawyer, James T. Moriarty, declined to comment.
April 17, 2020