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Executive Order Addresses Hoarding and Related Fraudulent Activity

When the COVID-19 outbreak made its way to the United States in early March, some people began panicking and overstocking on certain supplies. Toilet paper, disinfectant wipes, antibacterial soap, and hand sanitizer all flew off the shelves – and many shelves have remained empty of these products. While some households or businesses were unable to purchase anything, others had stockpiles of items that far outweighed their needs. Some people or companies began selling these coveted products at an extreme markup to those who needed them. 

This practice included critical medical supplies, such as N95 masks, that healthcare workers need to protect themselves while providing treatment to patients with COVID-19. On March 23, President Trump issued an executive order regarding hoarding medical and healthcare supplies to the detriment of healthcare providers. 

The Secretary of Health and Human Services (HHS) has designated certain materials to be scarce in light of the pandemic. Individuals, companies, and other entities are prohibited from accumulating such materials in excess of their reasonable needs for home or business consumption. The executive order gives federal officials the authority to criminally prosecute consumers or companies accused of hoarding such supplies or price gouging.

As of the end of March, the following were designated as scarce by the HHS:

  • N95 facepiece respirators
  • Other types of filtering facepiece respirators
  • Powered air-purifying respirators
  • Elastomeric and air-purifying respirators, along with associated cartridges and filters
  • Sterilization services for certain medical devices
  • Certain disinfecting devices
  • Medical gowns, isolation gowns, and other medical apparel
  • Tyvek suits and other personal protective equipment (PPE) coveralls
  • PPE face masks, surgical masks, face shields, surgical gloves, and medical gloves
  • Drugs with hydroxychloroquine HCI or chloroquine phosphate as the active ingredient
  • Portable ventilators
  • Ventilators or other machines that can be modified to be used as ventilators

The Department of Justice (DOJ) formed a task force to identify supply chain concerns, such as hoarding and price gouging, and there was a lead prosecutor named for each U.S. Attorney’s Office across the country. Investigators will be looking into suspected collections of scarce supplies that are unreasonable, and prosecutors are ready to file federal criminal charges. 

Reports indicate that the DOJ already took action to enforce anti-fraud and antitrust laws against a website out of Texas. The website fraudulently offered to send out “World Health Organization” medical kits to consumers, which would give them access to a vaccine. This website is accused of preying on vulnerable, scared, and confused consumers, as there is no legitimate vaccine against COVID-19 at this time. This is only one example of how these cases might play out. 

Contact an Experienced Antitrust Attorney with a Nationwide Practice

The Law Offices of George M. Sanders, P.C., wants to keep businesses and consumers alike up to date on antitrust issues as they evolve during the COVID-19 crisis. We are working and ready to represent clients facing antitrust issues. Whether you are trying to work with another company, have a major merger in progress, or are suspected of antitrust violations, we can help remotely. Contact us right away to discuss your situation.

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You need an experienced attorney at the Law Offices of George M. Sanders, P.C., who specializes in physician health care antitrust law.

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