The White House issued an executive order last week that criminalized hoarding and price gouging involving ventilators, face masks, gloves, and other items hospitals need to deal with the Covid-19 emergency.
The President has the authority to designate “scarce materials” under part of the Defense Production Act of 1950. The law’s two purposes are to prevent anyone from accumulating the designated materials in “excess of the reasonable demands of business, personal, or home consumption,” or accumulating them “for the purpose of resale at prices in excess of prevailing market prices.”
President Trump’s Executive Order 13910 issued on March 23 directed the Department of Health and Human Services (HHS) to create a list of “scarce materials” related specifically to the Covid-19 pandemic.
HHS published its list on March 25. It included various protective gloves, facemasks, respirators, ventilators, HCI drugs, medical gowns and coveralls, and disinfecting and sterilization equipment.
On March 24, U.S. Attorney General William Barr also issued a memo to all U.S. Attorneys, with guidelines about enforcing the anti-hoarding and profiteering law.
The AG’s memo said that while the Covid-19 emergency has “brought out the best in most Americans, there appear to be a few unfortunate exceptions.”
“We will not tolerate bad actors who treat the crisis as an opportunity to get rich quick,” the memo said.
The DOJ won’t target “regular Americans who are stocking up on the necessities of daily life or businesses acquiring materials reasonably needed for their own use.” Also excluded from enforcement are manufacturers or suppliers who are working with the government and with healthcare providers.
“But we will aggressively pursue bad actors who amass critical supplies either far beyond what they could use or for the purpose of profiteering,” the memo said. “Scarce medical supplies need to be going to hospitals for immediate use in care, not to warehouses for later overcharging.”
Violations of the Defense Production Act are punishable by up to a year in prison or a $10,000 fine, or both.
The DOJ now has a Covid-19 Hoarding and Price Gouging Task Force to make sure designated “scarce materials” get to hospitals that need them. Working as part of the task force, the FBI has already discovered and confiscated hoarded items.
HHS said this week the confiscated items, which it sent to hospitals in New York and New Jersey, included 192,000 N95 respirator masks, 598,000 medical grade gloves, and 130,000 surgical masks, along with surgical gowns, disinfectant towels, and bottles of hand sanitizer and spray disinfectant.