A Maryland-based company has agreed to pay $550,000 to resolve claims that it deceived the Massachusetts Bay Transportation Authority about hand sanitizer purchased to prevent the spread of COVID-19. The Massachusetts Attorney General’s Office announced the settlement yesterday.
Hand Sanitizer Marketed Without Evidence of Its Effectiveness
Federal Resources Supply Company marketed “Theraworx Protect” as effective in fighting the coronavirus. It claimed that the product would sanitize and fight off COVID-19 for six hours. However, the product contained no alcohol, and the company lacked evidence that it was effective against the virus. (When soap and water are unavailable, the CDC recommends hand sanitizer with at least 60 percent alcohol as an alternative.)
Relying on Federal Resources’ false statements, the MBTA placed orders for three large purchases of the hand sanitizer. Fortunately, the Attorney General’s Office learned of the fraud before the MBTA paid for the product.
This company’s reckless and deceptive actions put the health of our frontline workers and the public at even further risk during this unprecedented public health crisis. We took action against this company because their attempt to exploit people during the COVID-19 pandemic for their own profit was not only unacceptable, it was illegal.
-Attorney General Maura Healey
Massachusetts Sued Company Under False Claims Act and Consumer Protection Act
The Attorney General’s Office sued Federal Resources under both the state’s False Claims Act and its Consumer Protection Act. In settling, Federal Resources will pay $400,000 and issue a credit of over $150,000 to the MBTA for already-used sanitizer. Federal Resources will remove all unused Theraworx Protect from MBTA facilities. In addition, it has agreed not to market or sell the hand sanitizer to any Massachusetts agency. It also is prohibited from marketing the product in Massachusetts with any claim that it is effective against COVID-19.
Steve Poftak, General Manager of the MBTA, expressed appreciation for the work of the Attorney General’s Office.
The MBTA greatly appreciates the work of the Attorney General’s office, which held this company accountable and recovered the T’s costs. The safety of our employees is a top priority, and it’s shameful that, during a pandemic, a vendor would make false claims about a product’s effectiveness.
State and Federal Law Enforcement Are Fighting COVID-19 Fraud
The Massachusetts Attorney General’s Office and the U.S. Attorney’s Office in Massachusetts both have made fighting COVID-19 fraud a top priority. We reported early in the pandemic that the United States Attorney called on whistleblowers to report hoarding or price-gouging of critically-needed medical supplies. In addition, as this case illustrates, the False Claims Division of the Massachusetts Attorney General’s Office will fight to protect public funds spent to protect citizens from the virus. AG Healey created that Division in 2015 “to safeguard public funds and promote integrity and accountability in public contracting.”
Persons with information about fraud involving state or municipal contracts can call the False Claims Division’s tip line at 617-963-2600. Also, our office specializes in helping whistleblowers of all types report fraud to the government. Several government programs exist to protect and reward whistleblowers who report fraud by those seeking to profit from this crisis.
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