Brooklyn Supermarket Company Admits to Price Gouging Pandemic PPE Supplies

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FILE PHOTO: Mask production in California

NEWARK, NJ – A Brooklyn-based chain of grocery stores, Milk & Honey and its partners have admitted price gouging its customers who bought KN95 masks at a nearly 400% markup.

The company which operates stores across New Jersey purchased 250,000 KN95 masks and sold them for $5.25 per mask, the Department of Justice said in a release today.

Milk & Honey Ventures LLC (MHV), a company based in Brooklyn, New York, pleaded guilty by videoconference before U.S. Magistrate Judge Jessica S. Allen on March 28, 2022, to an information charging it with price gouging in violation of the Defense Production Act.

“In March 2020, MHV and two partners purchased 250,000 KN95 filtering facepiece respirators from a foreign manufacturer. MHV and one of those partners then sold 100,000 of those masks to a chain of New Jersey grocery stores at prices in excess of prevailing market prices,” U.S. Attorney Sellinger said. “MHV sold the masks at a price of $5.25 per mask, which amounted to a markup of more than 400 percent from its acquisition cost. Prior to the spread of COVID-19, MHV had no history of selling personal protective equipment.”

A violation of the Defense Production Act carries a maximum fine of $200,000, or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss sustained by any victims of the offense, whichever is greatest. Sentencing for MHV is scheduled for Aug. 9, 2022.