Georgia businessman charged with hoarding, price gouging face masks in violation of Defense Production Act

Milton Ayimadu has been arraigned on federal charges of hoarding and price gouging in violation of the Defense Production Act of 1950 (DPA).  Ayimadu was charged by a criminal information.

“Ayimadu allegedly saw the unprecedented COVID-19 global pandemic as an opportunity to make a profit,” said U.S. Attorney Byung J. “BJay” Pak.  “Desperate to find personal protective equipment during the pandemic, thousands of customers unfortunately paid his inflated prices.”

“It is disheartening that anyone is alleged to have taken advantage of consumers who are desperate to acquire protective equipment that could save theirs, and other people’s lives,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Using the resources of all of our federal partners, we are making every effort to pursue anyone who tries to take advantage of citizens during this global pandemic.”

“The Postal Inspection Service is committed to investigating individuals and companies that intentionally hoard critical protective supplies or sell those items above market prices during the COVID-19 global pandemic,” said Inspector in Charge Tommy D. Coke.  “Postal Inspectors will continue to coordinate with our law enforcement partners to ensure these violators are brought to justice.”

“IRS Criminal Investigation will continue to defend our citizens against those exploiting the COVID-19 global pandemic for personal benefit,”, said James E. Dorsey, Special Agent in Charge IRS-Criminal Investigations. “Today’s charges show IRS Criminal Investigation is committed to utilizing our financial expertise wherever we are needed in coordination with other agencies.”

“When the nation needed facemasks the most, Ayimadu decided to turn our fears into dollars,” said acting Special Agent in Charge Robert Hammer, who oversees Homeland Security Investigations (HSI) operations in Georgia and Alabama. “HSI and its partners are working diligently to investigate and arrest those criminals that have decided to use illegal business practices to increase their profits during this global pandemic.”

According to U.S. Attorney Pak, the charges, and other information presented in court: from early March 2020 to May 2020, during the COVID-19 global pandemic, Ayimadu engaged in hoarding and price gouging of more than 200,000 face masks in violation of the DPA.

On March 18, 2020, as COVID-19 spread across the country, the President of the United States invoked the powers of the DPA, which prohibits hoarding and price gouging–that is, selling in excess of prevailing market prices–certain materials that are designated as scarce materials.  Because of the rapidly dwindling stock of personal protective equipment needed to care for seriously ill patients and prevent further spread of COVID-19, on March 25, 2020, the Secretary of Health and Human Services, with authority delegated by the President, designated certain health medical resources as scarce materials under the DPA.  Among the materials designated were face masks that cover the user’s nose and mouth.

Ayimadu allegedly purchased more than 200,000 face masks from a foreign country for approximately $2.50 each and then re-sold them to American consumers, through his website, BabyPuuPu.com, for approximately $5.00 each—a markup of approximately 100 percent.  During the two months in which Ayimadu sold face masks, he engaged in over 22,000 financial transactions.  While Ayimadu priced his masks in excess of prevailing market prices to maximize his profits to the detriment of consumers desperate for personal protective equipment during the COVID-19 pandemic, manufacturers of authentic N95 masks continued selling face masks for the pre-pandemic price of under $2.00 per mask.

Milton Ayimadu, a/k/a Don Milton, 22, of Stockbridge, Georgia, was arraigned on August 6, 2020, before U.S. Magistrate Judge Russell G. Vineyard.  Members of the public are reminded that the criminal information contains only charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Internal Revenue Service Criminal Investigation, and the U.S. Postal Inspection Service.

Assistant U.S. Attorneys Tal C. Chaiken and Russell Phillips are prosecuting the case.  Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, U.S. Attorney for the District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs.

This is a press release from the Department of Justice.