Manalapan Man Charged In $45M Face Mask Fraud Scheme

MANALAPAN, NJ — A Manalapan man has been named by the U.S. Attorney General for trying to sell New York City and the state of Florida N95 and N99 face masks for $45 million. Federal prosecutors say he not only never had the masks in his possession, but also jacked up the prices by 500 percent, trying to sell masks he obtained for $1.27 for as much as $6.65 per mask.

Ronald Romano, 58, of Manalapan, is charged with with one count of conspiring to commit wire fraud, one count of wire fraud, and one count of conspiring to violate the Defense Production Act. He was arrested early Tuesday morning at his home in Manalapan, according to the New York Times. His company is called Performance Supply, LLC and is listed with an Englishtown P.O. Box.

Beginning in February, Romano — who at the time was working as a used car salesman — began trying to obtain large quantities of personal protective equipment, including the N95 and N99 masks, say the feds.

The masks were made by 3M, and Romano wanted to sell them to the city of New York at a 400 percent mark-up from the 3M listed price. He also tried to sell the masks to the state of Florida for a 500 percent mark-up, say authorities.

Neither state took the bait. Instead, after they were approached by Romano's sales team, procurement specialists at New York City's Department of Citywide Administrative Services called the FBI, and Romano and his conspirators started being investigated by the U.S. Department of Justice’s COVID-19 Hoarding and Price Gouging Task Force. That task force was created this spring by U.S. Attorney General William Barr and is led by Craig Carpenito, United States Attorney for New Jersey.

The 3M company, which makes the masks, also assisted in the investigation.

In total, prosecutors say Romano claimed he had seven million of the coveted N95 face masks to sell, which he said he wanted to sell to New York City for $45 million. 3M told the FBI they never manufactured the masks for Romano, and he was not an authorized re-seller of the masks.

Romano worked with a team of conspirators, and one of them took issue with his pricing, according to the criminal complaint, unsealed just yesterday.

“WOW!! I just saw the prices. They are outrageous on a per-mask basis. The N95 mask I sent you in the last e-mail with a valve is only $1.95 per mask. And you want to charge over $4?” read one email an unnamed conspirator sent to Romano.

The same person sent Romano a second email: “Look, I really have a problem with the pricing. It’s one thing to charge (as [CC-1] told me last night) 25-30 percent more than the usual price — but here you are charging around 260 percent. . . . I feel like the prices you have sent me are taking advantage of people.”

Nonetheless, that person tried to sell the masks on Romano's behalf, say prosecutors.

Prosecutors say Romano created a fictitious authorization letter in March, which falsely represented that his company was authorized to sell millions of units of 3M-brand face masks. They were not, said federal prosecutors.

Then in mid-March, brokers acting on Romano's behalf approached New York City, which at the time was in critical need of the masks for doctors and nurses.

Negotiations with the city were set up and in those talks, prosecutors say Romano and others "repeatedly made fraudulent representations regarding, among other things, their authority and ability to supply 3M-brand PPE manufactured in the United States, and their track record in other PPE deals."

In their effort to close the deal, prosecutors say Romano lied about his past experience, citing a PPE deal with the Florida Division of Emergency Management. That deal never occurred. When New York officials asked for a reference, Romano gave them the name of a co-conspirator.

In one of the messages Romano texted to a conspirator: “I’m working on a few deals that if I get any of them you might be buying a Ferrari," say authorities.

“As alleged, used car salesman Ronald Romano saw the current health emergency as an opportunity to cash in, using lies and deception in what he envisioned as a get-rich-quick scheme," said Geoffrey Berman, the United States Attorney for the Southern District of New York. "Romano allegedly lied repeatedly about his authority and ability to sell large quantities of personal protective equipment to the City – equipment he knew was desperately needed for use by frontline medical workers and first responders. And he allegedly offered to sell this phantom equipment to the City at grossly inflated prices. Now Ronald Romano’s short-lived second career as a purveyor of vital protective gear is over.”