Attorney General Dana Nessel’s office is issuing court-authorized subpoenas in its investigation of a southwest Michigan importer that may be selling counterfeit or misleadingly-labeled personal protective equipment (PPE) to consumers, including multiple nursing homes, during the coronavirus disease 2019 (COVID-19) crisis.
The Attorney General’s office is investigating Grand Rapids-based Kooz Concepts International Inc. and its role relative to a consumer complaint the office received of price-gouging practices by another southwest Michigan business, Penny Pinchers, a small grocer located in Battle Creek.
The subpoenas will be used to investigate Kooz Concepts’ business practices through sales records and other documentation, as well as testimony from Kooz Concepts’ employees engaged in the company’s operations and from other related entities identified during the investigation.
Kooz Concepts is likely in violation of the Michigan Consumer Protection Act for causing confusion among customers about its goods, specifically face masks, which have become highly sought products during the COVID-19 pandemic.
One of those customers, Penny Pinchers, posted on social media that it was selling N-95 face masks for $3 apiece. The masks sold were basic surgical masks and not N-95s. Certain masks advertised as N-95s may be imported counterfeits and not actually carry that official designation or offer the same level of protection. The Centers for Disease Control and Prevention (CDC) offers guidance on how to distinguish between legitimate respirators and counterfeits.
“As my office becomes more aware of counterfeit masks being marketed and sold as products that offer more protection than they actually do, there is a growing demand for consumers to take their own precautions to make sure the equipment they are buying is not a knock-off,” Nessel said. “As Michigan works through our COVID-19 situation, scammers and con-artists will attempt to dupe unsuspecting victims into buying lower-grade, poorer-quality products under the false promise of security and protection from this virus. They are putting lives at risk, and they will answer for such lawlessness.”
Investigators with the Attorney General’s office believe the owner of Penny Pinchers, James Ziebell, was under the assumption that he purchased true N-95 masks and told investigators that he sourced the product from a Grand Rapids-based supplier (Kooz Concepts) because of customer demand at his store. The boxes of masks Ziebell received had “N95” markings on them.
The owner of Kooz Concepts, Kraig Koeze, told investigators that his business typically imports Chinese products that are sold at trade shows, and that a family member who works in health care asked him to use his connections due to a desperate need for PPE.
Koeze said he obtained the “basic 3-ply masks” from a “reliable source” in January and provided questionable documentation alleging the source is certified by the Food and Drug Administration (FDA). He also told investigators that his interpretation was the masks he sold are KN-95s and not N-95s, though didn’t have a clear explanation for why the boxes sold to Penny Pinchers were marked as N-95s.
Koeze also told investigators that, in addition to Penny Pinchers, he sold masks to other businesses, including nursing homes and a fast-food restaurant. He declined to provide additional details on those purchasers; however, the Attorney General served Kooz Concepts with a subpoena Friday afternoon requiring identification of those businesses on Saturday. Kooz Concepts then provided that information, and Attorney General staff began reaching out to the small number of affected businesses to make sure they understood the masks are not N-95s.
Considering the current public health emergency, the Attorney General’s office believes it is critical for consumers to exercise caution when purchasing products like PPE and educate themselves by visiting reliable websites like the CDC’s, and learning of what others are saying about a company or website through the Better Business Bureau.
Meanwhile, price-gouging continues to be a concern in Michigan. As of 7 a.m. today, there have been 3,731 COVID-19-related price-gouging complaints made to the Attorney General’s office since early March.
Moreover, Gov. Gretchen Whitmer issued an executive order on price-gouging which states a person must not offer for sale or sell any product in this state at a price that is more than 20 percent higher than what the person offered or charged for that product as of March 9, 2020, unless the person demonstrates that the price increase is attributable to an increase in the cost of bringing the product to market or to an extraordinary discount in effect as of March 9, 2020.
Consumers can file a complaint online or by calling the Consumer Protection tip line, 877-765-8388. Hours of operation are between 8:30 a.m. and 4:30 p.m. Monday through Friday.