Jason Colantuoni, 35, was charged Thursday in US District Court in Boston with a sole count of conspiracy to commit price gouging in violation of the Defense Production Act, Acting US Attorney Joshua S. Levy’s office said.
The act gives the president the authority to control the general distribution of materials deemed scarce and critical to national defense in an emergency, according to court documents. Under the law, such items can’t be sold “at prices in excess” of prevailing market rates.
In March 2020, a friend of Colantuoni’s started a company in Florida in response to the pandemic, federal prosecutors said. Colantuoni, his friend, and the company’s head of sales obtained masks from various sources and allegedly sold them “to desperate hospitals in Massachusetts and elsewhere at prices in excess of the prevailing market price,” prosecutors said.
They allegedly offered to sell masks for as much as $11.95 each, prosecutors said.
“The weighted average price for the company’s purchases of N95 masks was approximately $4.48 per mask, while the weighted average price for the company’s sales of N95 masks to hospitals was approximately $9.91 per mask,” prosecutors said.
According to a plea agreement filed in court, prosecutors have agreed to recommend a term of incarceration “within the guidelines” applicable to Colantuoni in exchange for his guilty plea, as well as six months of supervised release and “restitution in an amount to be determined at sentencing.”
A plea hearing hasn’t been set.
“Mr. Colantuoni was not an owner or officer of the company,” his lawyer, Tracy Miner, said in a statement Friday. “He did not set prices or share in the profits of the company. He was trying to help his friend’s business out. He has accepted responsibility for his role.”
The charge carries penalties of up to a year in prison, up to a year of supervised release, and a maximum fine of $10,000, prosecutors said.
Travis Andersen can be reached at email@example.com.