Last week, the Massachusetts Attorney General’s Office announced a settlement with Bedrock LLC for N95 mask fraud. Bedrock, a Salem-based company, will pay $3.5 million. The AG’s Office alleged that Bedrock made repeated false statements and failed to provide 900,000 face masks after the Commonwealth entered into an emergency purchase order for the masks. This case illustrates the AG’s commitment to holding accountable fraudsters taking advantage of the COVID-19 health crisis to cheat taxpayers. Authorities are pursuing and penalizing defendants that defrauded the government during the nation’s life-altering public health crisis. Massachusetts Attorney General Maura Healey said,
This company tried to take advantage of the state by holding onto millions of taxpayer dollars it owed for masks that it never delivered. The state relied on this order to provide life-saving masks during the COVID-19 pandemic. This settlement requires Bedrock to return the more than three million dollars it owes the state and to pay a significant penalty for its false statements.
State and Federal False Claims Acts
Many whistleblowers bring suits under the federal False Claims Act. This law is the U.S. Government’s primary weapon for combatting fraud. Whistleblowers can sue persons or entities that are defrauding the federal government. If successful, they can recover damages and penalties on the government’s behalf. However, a majority of states, including Massachusetts, have enacted their own False Claims Acts as a way to recover when companies or individuals defraud the state government. Like the federal statute, the Massachusetts False Claims Act provides for penalties and treble damages against parties that violate it. In this case, Massachusetts will recover under its own False Claims Act.
Bedrock’s N95 Mask Fraud
According to the Massachusetts AG’s office, in April 2020, the Commonwealth’s Operational Services Division (OSD) entered into a contract with Bedrock Group LLC to purchase one million N95 masks for $3.6 million. OSD made this purchase in an emergency situation to protect the public from the deadly virus. At that time, the Commonwealth – and country as a whole – were scrambling to obtain personal protective equipment. Bedrock opportunistically contacted the Commonwealth with an offer to supply masks. It claimed the masks would come from a reputable manufacturer in China. According to the purchase order, the masks were to ship mid-April. By June, however, Massachusetts had received fewer than 100,000 of the one million masks Bedrock had promised. Subsequently, the Commonwealth terminated the order and demanded its money back.
Over the next six months, Bedrock repeatedly acknowledged its obligation to refund money to the Commonwealth of Massachusetts. However, it continuously evaded doing so. Last week in Suffolk Superior Court, the parties finally settled the matter with an assurance of discontinuance. The agreement requires Bedrock to repay Massachusetts $3.2 million and to pay an additional $250,000 for false claims penalties. Also, the assurance of discontinuance bars Bedrock from contracting with the Commonwealth or any political subdivision for five years.
Know of Fraud Taking Place in Massachusetts?
To date, the Massachusetts AG’s office has recovered over $1.5 million from defendants who exploited the Covid-19 crisis. For example, last November a Maryland-based company agreed to pay $550,000 after deceiving the Massachusetts Bay Transit Authority into buying hand sanitizer that contained no alcohol. Then, in January, the AG’s False Claims Division reached a $1 million settlement with Colonial Automotive Group Inc. to settle claims that it forced employees receiving unemployment funds to work without pay. Although we are beginning to see the light at the end of the Covid-19 tunnel, AG Healy urges anyone with information about fraud taking place in Massachusetts to contact the Attorney General’s Office’s False Claim Division tip line at 617-963-2600. Further, there are resources available on our website if you know of fraud and are interested in filing a qui tam suit on behalf of the government.
