A Charleston cosmetics company is accused of selling hundreds of thousands of fake protective face masks for medical professionals battling the coronavirus, according to a lawsuit filed in New Jersey.
Ally Cosmetics, which lists a 216 King St. address, and principal shareholder Maor Kadosh falsely claimed the masks were approved by federal regulators for medical use, according to the lawsuit filed by Fairfield, N.J., distributor BMY Global Sourcing.
BMY alleged Ally Cosmetics has failed to refund the $640,000 it paid for 320,000 allegedly worthless KN-95 masks, the Chinese equivalent to N-95 masks.
BMY said it did not discover the masks weren't approved for medical use until after it had contracted to sell them to an emergency clinic in Scranton, Pa., which rejected them.
"This is a classic case of fraud in connection with personal protective equipment that has become so essential during the COVID-19 pandemic," Joseph Tripodi, a lawyer for BMY, said in a court filing.
A lawyer for Kadesh and Ally Cosmetics could not be reached for comment.
Tripodi, in the complaint filed in New Jersey Superior Court, said BMY purchased the masks in May, when demand for personal protective equipment was at its height. The distributor has made several demands for repayment, according to the lawsuit, but Ally Cosmetics has not responded.
BMY is basing the complaint against Ally and Kadosh on allegations of fraud, breaches of contract and warranty, and unjust enrichment. The distributor is seeking compensatory and punitive damages, as well as legal fees.
Ally Cosmetics SC Inc. registered with the South Carolina Secretary of State in mid-2018, listing 216 King as its address. The agency said the business was considered dissolved in October.
Allegations of fraudulent personal protective equipment have proliferated during the coronavirus pandemic, with N95 mask manufacturer 3M Inc. investigating more than 7,700 fraud reports globally. Late last week, a trade group alerted dozens of Washington state hospitals that masks believed to be purchased from the company are counterfeits that were not made by 3M.
The U.S. government also is taking aggressive measures to combat PPE-related fraud. The Federal Trade Commission has investigated several companies it says took advantage of coronavirus fears to sell faulty protective equipment.