Kettering Health accuses supplier of N95 mask fraud

(Dreamstime/TNS)
(Dreamstime/TNS)

Around the December surge peak, the system says it received 300,000 fakes, which gave one employee an allergic reaction.

Kettering Health Network is suing a Colorado company for more than $1.2 million, accusing the supplier of never providing N95 masks the hospital network ordered in the spring and then in December delivering counterfeits.

In the lawsuit, Kettering Health said the company, Fully Promoted, based in Loveland, Co., also later provided counterfeit N95 masks that were fraudulently passed off to them as official masks by reputable manufacturer 3M.

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In a pandemic driven by a respiratory virus, counterfeit N95 masks are a problem because they may not be effective at filtering airborne particles.

The lawsuit was filed against both Jade Designs LLC, which does business as “Fully Promoted,” and against manager Jennifer Snyder on May 3 in U.S. District Court’s Southern District of Ohio.

The Dayton Daily News left Fully Promoted a request for comment but did not hear back. Kettering Health declined to further comment, saying it doesn’t comment on pending litigation.

Spring supplies scramble

In March 2020 when coronavirus cases first started to be detected in Ohio, there was an intense scramble for medical masks and other personal protective equipment.

The shortage was enough to prompt hospitals and the state government to agree to suspend any procedures they could in order to conserve supplies. Prices spiked. Traditional suppliers couldn’t meet demand. New vendors stepped in.

In the midst of this spring surge, Kettering Health stated that it faced a systemic shortage of PPE including N95 masks, needed to protect workers from exposure from the respiratory virus.

Kettering’s buyers were working with networks of vendors and potential vendors to find PPE sources, including the critical certified N95 masks.

Kettering Health needed the supplies for its nine hospitals: Fort Hamilton, Grandview, Greene, Kettering Behavioral, Kettering Medical, Soin, Southview, Sycamore and Troy. The 12,000-employee system also has a network of physician practices and other outpatient sites.

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In March 2020, Kettering said the company began to ask about buying 30,000 N95 masks from Fully Promoted — a potential vendor Kettering had not done business with before.

On March 19, 2020, court documents state that Fully Promoted sent an email to KHN stating that it had the “official word on the N95 masks.” KHN wired Fully Promoted the full purchase price of $86,700 around March 23, 2020, expecting the masks to be delivered in about 15 days.

Kettering says the masks were never delivered.

Soon after the initial order, Kettering asked about buying an additional 300,000 N95s. Around March 24, Kettering says Fully Promoted said it could get the 300,000 additional masks.

Kettering claims the vendor said the masks would be delivered by the end of April in partial shipments and Kettering said around March 27 it paid an additional $1.08 million upfront as demanded.

The hospital network claims the vendor engaged “in a months-long campaign of stall and delay tactics” claiming transportation issues and problems communicating with manufacturers 3M and Honeywell, which Kettering said it believes were false claims.

The complaint details back and forth communication in May, June, and July. By August, Kettering said it had an alternative for N95s and wanted a full refund. Kettering claims they got a partial refund and says it is still owned $46,700 of that initial purchase.

After a partial refund, Kettering claims Fully Promoted again began encouraging the health system to work with it, saying the corporate office “has been able to acquire the 3M 1860′s [N95 masks] so if the need arises again in the future please let me know.”

Second surge

In the fall, a second surge began.

Once again, Kettering needed to get a large supply of personal protective equipment. The health network’s buyers were told to canvas their networks and secure enough N95s, court documents state.

Kettering Health went back to Fully Promoted again.

“Having falsely represented to KHN over a period of several months that 3M had vetted Fully Promoted and that Fully Promoted was in possession of 3M masks, KHN again contacted Fully Promoted in December 2020 regarding its current capacity to provide 300,000 3M NIOSH-certified N95 masks,” the health network stated.

Fully Promoted is accused of saying it had certified 3M masks, that they were already in the U.S. and that those masks could be shipped to Kettering in a few days.

On Dec. 10 — around when Ohio hospitals were hitting peak surge — Kettering ordered 300,000 masks at $1.19 million, or a little under $4 per mask. Before the pandemic, these masks typically cost about $1 or less.

The hospital claims it had concerns the masks were counterfeit after they arrived, including that one employee had an allergic reaction to the mask during fit testing.

A Kettering employee matched the shipment lot number to a lot number listed in a counterfeit warning issued by 3M.

Kettering said the system sent information to 3M for authenticity and in January 2021, 3M called the supplier “suspicious” and then later that month followed up and said “the product from this seller is counterfeit and we recommend you DO NOT use product from this seller.”

Kettering said February 2021 they demanded a full refund, which they never received. Also the system said it cost them about $20,000 to fit-test the masks with hundreds of employees before discovering they were allegedly counterfeit.

“Despite clear confirmation from 3M that the masks are counterfeit, Fully Promoted continues to insist that the masks could somehow still be legitimate and refuses to refund KHN until Fully Promoted has the opportunity to re-sell these counterfeit masks to unsuspecting third-parties,” Kettering stated. “KHN has refused to be a part of Fully Promoted’s scheme to double-down on its fraud and sell these masks to yet another unsuspecting victim.”

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Fraud common in pandemic

Given the national hunt for scarce supplies throughout the pandemic, there have been many cases of fraudulent PPE that rose to law enforcement getting involved.

In February U.S. Customs and Border Protection officers in Cincinnati seized 450 boxes each with 240 counterfeit 3M surgical masks — enough to fill a sea container.

From the beginning of the COVID-19 pandemic through March 31, 2021, Customs reported that it seized more than 34.6 million counterfeit face masks.

“Criminal organizations are attempting to exploit the COVID-19 pandemic and e-commerce marketplaces to sell counterfeit pharmaceuticals, personal protective equipment and other medical devices to unsuspecting American consumers,” said John Leonard, Customs executive director for trade policies and programs.

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