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Date: 07-14-2020
Case Style:
United States of America v. Kevin Jay Lipsitz
Case Number: 1:20-mj-00509-RLM
Judge: Roanne L. Mann
Court: United States District Court for the Eastern District of New York (Kings County)
Plaintiff's Attorney: United States District Attorney’s Office
Defendant's Attorney:
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Description:
Brooklyn, NY - The United States of America charged Kevin Jay Lipsitz with violating the Defense Production Act and wire fraud.
Lipsitz allegedly sold personal protective equipment (PPE) and other health and medical materials, some of which were designated as scarce due to the COVID-19 pandemic, at prices far exceeding prevailing market prices. Lipsitz also allegedly lied to customers about his inventory of such scarce materials and his ability to timely ship those items to customers. Lipsitz is the Chief Executive Officer and apparent sole owner of SuperGoodDeals.com Inc. (SGD), a New York corporation located in Staten Island.
According to court filings, between February 2020 and April 2020, Lipsitz and SGD accumulated a large stockpile of PPE and other medical products, including facemasks and N-95 and KN-95 filtering face-piece respirators. Lipsitz then sold the items at markups ranging from 150 percent to over 500 percent above his purchase price. To induce customers to purchase his products, Lipsitz misrepresented SGD’s inventory and ability to quickly fill and ship orders. On the SGD website, Lipsitz promised customers that they could “pay today” and their orders would ship “tomorrow.” Lipsitz would issue same day shipping confirmations which included tracking numbers. Nevertheless, Lipsitz did not deliver the PPE in the promised timeframe, often shipping the merchandise weeks after orders were placed and after customers lodged complaints or tried to cancel their orders.
“The defendant allegedly took advantage of the pandemic and the public’s urgent need for life-saving PPE to enrich himself illegally,” stated United States Attorney Donoghue. “Our Office and the Department’s COVID-19 Hoarding and Price Gouging Task Force will continue working tirelessly to put an end to such conduct.” Mr. Donoghue expressed his grateful appreciation to the United States Attorney’s Office in New Jersey, and the Federal Trade Commission for their assistance in the case.
“We’re continuing to work diligently across the country to find those people who would turn a deadly health crisis into an opportunity to make illicit profits,” stated Carpenito. “As alleged in the complaint, this defendant not only overcharged for desperately needed personal protective equipment, he lied to his customers about how fast he could ship their orders, taking their money up front and leaving them with nothing to show for it. This is precisely the type of conduct the Task Force will continue to aggressively investigate and prosecute.”
“Long before the citizens of New York City fully anticipated the impact of the COVID pandemic, Lipsitz was busy stockpiling essential PPE that would soon become a scarce commodity. At a time when these items were needed for a critical health crisis, he then illegally marked up the price—in some cases by a 500% margin—for the benefit of himself and himself alone. When this country faces a crisis, we are supposed to stand together as a community and push through it, not turn our backs, gouge fellow citizens, and try to profit from it. The alleged behavior is a disgrace,” stated FBI Assistant Director-in-Charge Sweeney.
“Price gouging PPE to make a profit during a global pandemic is just part of Lipsitz’ alleged crimes. He is also alleged to have taken advantage of customers through false promises and fraud,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI New York, working with the FBI and DOJ’s COVID-19 Hoarding and Price Gouging Task Force, will continue to arrest those whose criminal acts hurt a community in need.”
“At a time when life-saving PPE was needed to fight COVID-19, the defendant chose personal greed over the life and safety of first responders and the heroes in the medical community. Price gauging, hoarding, and lying to consumers will always be uncovered by law enforcement; and those participating in such schemes will be brought to justice,” stated USPIS Inspector-in-Charge Bartlett.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, United States Attorney for District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving PPE occurs. The Secretary of Health and Human Services has issued a Notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.
Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: disaster@leo.gov.
The government’s case is being handled by the Office’s Business & Securities Fraud and General Crimes Sections. Assistant United States Attorneys Julia Nestor and Andrew Wang are in charge of the prosecution.
The Defendant:
KEVIN JAY LIPSITZ
Age: 61
Staten Island, New York
Charge:
Violation of 18 U.S.C. 1343 which provides:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
Outcome: The charges set forth in the Indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Plaintiff's Experts:
Defendant's Experts:
Comments: