A Woman in Santa Monica Confesses to Price Gouging in Trade of Scarce N95 Masks Which She Sold at High Prices During the COVID-19 Pandemic

A Woman in Santa Monica Confesses to Price Gouging in Trade of Scarce N95 Masks Which She Sold at High Prices During the COVID-19 Pandemic

Los Angeles – On 13th October 2020, A Santa Monica day spa proprietor was indicted in federal court for stockpiling N97 respirators in the prediction of the coronavirus pandemic and the profiteering by trading the scanty masks at enormously high prices- sometimes approximately  1.100% over the market price.

Niki Schwarz, age 55, of Santa Monica, the proprietor of Tikkun Holistic Spa, was identified in a piece of criminal information indicting her with 1 count of excess pricing and stockpiling. In a plea accord filed on 13th October 2020, Schwarz accepted a guilty plea to the felony crime.

In the plea accord, Schwarz confessed that in February, she started stockpiling N97 respirators in predicting a scarcity that would be due to the universal pandemic caused by the advancement of the novel COVID-19. From the dawn of February up to the end of June, Schwarz stockpiled approximately 20,000 N97 masks that were made by 3M (market price varying from (1.02 USD to 1.27 USD) and Alpha Pro (market price of 86 cents).

In March, the United States government pronounced N97 respirators as “scarce materials” in accordance with the Defense Production Act of 1950 because of the immense necessity of the health care providers associating with coronavirus victims to utilize for individual protective equipment.

Schwarz confessed that she acquired N97 respirators with intend of trading them at above-list rates and that she traded the masks for approximately 15 USD each.

As per the plea accord, “Schwarz stockpiled and traded the masks at excess prices of the current market prices knowingly, that is, with the awareness that the masks had been pronounced as scarce materials and with the awareness that stockpiling of the pronounced materials for trade in excess of the current market prices was illegal.

On 1st March, a colleague told Schwarz that the colleague was going to end the sale of N95 masks since she maintained it was an offense- and that excess pricing could cause in a prison sentence of one year-but Schwarz carried on with the sale of the masks at high prices.

Schwarz admitted the stockpiling and excess pricing crime in the plea accord carried a regulatory maximum sentence of one-year imprisonment.

Schwarz would get an arraignment directing her to make an opening hearing in the United States District Court, most probably at the beginning of November.

The United States Postal Inspection Police conducted the investigation for this case.

The prosecution for this case was conducted by Assistant United States Attorney of the Major Frauds Section Jeff Mitchell, who is the coordinator of the Department of Justice COVID-19 Hoarding and Price Gouging Task Force.

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