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3M Says It Stopped a $14 Billion N95 Fraud

The news comes after a court victory in Indiana. More legal action related to the alleged scheme is likely, the company says.

3M, parent company of Top 40 promotional products supplier 3M/Promotional Markets (asi/91240), has scored another legal victory in its fight against fraud tied to the coronavirus pandemic, stopping what it says was a $14.25 billion scheme centered on its N95 respirator masks.

Fraud Alert

Maplewood, MN-based 3M announced on Thursday, July 9 that it had resolved a case in federal court against ZeroAqua and its agent Zachary Puznak.

Under oath, Puznak testified that the architects of a scheme aimed at defrauding Indiana officials deceived him and that he was a conduit through which they tried to sell the officials $14.25 billion worth of N95 masks. The would-be advancers of the alleged fraud did not have the masks and were not able to provide them.

“The resolution of this case has permanently stopped a scam that used 3M’s name and the promise of nonexistent N95 respirators to target emergency officials and profiteer during the pandemic,” said William Childs, 3M senior counsel. “We will continue our global fight against fraud and work with law enforcement to help punish bad actors.”

3M said it intends to pursue additional court action against the additional bad actors identified in its investigation of the alleged $14.25 billion scheme and in Puznak’s testimony. The Puznak case was resolved through the entry of a consent judgment, a court-entered permanent injunction, and a payment to 3M for donation to a COVID-19 related charity. Puznak also issued an apology.

“If I understood then what I understand now, I never would have gotten involved in this scheme,” Puznak’s statement said in part. “I have testified under oath that the people who contacted me were attempting to take advantage of my best intentions and use me as a vehicle for their attempt to commit fraud on the State of Indiana. Public officials and healthcare workers are heroes in this important fight. I have done and am going to do what is necessary to make this right.”

In an unrelated case, 3M settled in late June a lawsuit against a Florida company, TAC2 Global, that it had accused of price gouging and other malfeasance in connection with 3M’s N95 masks.

This year, 3M has filed 17 lawsuits in the U.S. and Canada to combat fraud related to its N95 masks, which are badly needed during the coronavirus pandemic. The damages 3M seeks in these enforcement efforts are for the harm alleged bad actors cause and to punish wrongdoers. Any damages recovered are donated to COVID-19 relief efforts at nonprofit organizations, including Direct Relief, the company says.

3M asserts that it has not, and will not, increase the prices of its respirators as a result of the pandemic.