In a first of its kind case, the office of the United States Attorney for the Eastern District of New York has brought criminal charges against a Long Island entrepreneur under the Defense Production Act. The defendant owns several New York based businesses that sell sneakers and apparel. After a search of defendant’s warehouse, investigators discovered 100,000 N95 masks, 10,000 surgical gowns, over 2,000 full-body isolation suits and over 500,000 pairs of disposable gloves. According to prosecutors, the defendant is no goody-two-shoes - he later sold these items to “uniquely vulnerable” customers on shoe-string budgets such as the Association to Benefit Children and the New York Foundation for Senior Citizens. The inflated prices he charged resulted in profits of up to 1,328%. This is the first instance of federal prosecutors using the Defense Production Act of 1950 to target hoarding and price gouging in the current COVID-19 health crisis, but they obviously feel that the shoe fits. Defense counsel Bradley Gerstman is confident that the allegations against his client are “unconscionable and unsustainable in a court of law” and is not shaking in his shoes.
About Faruqi & Faruqi, LLP
Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Georgia and Pennsylvania.
Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.
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About Stephen Doherty
Stephen Doherty is Senior Counsel in the Pennsylvania office of Faruqi & Faruqi, LLP. Mr. Doherty practices in the area of antitrust law and is significantly involved in prosecuting antitrust class actions on behalf of direct purchasers of brand name and generic drugs and charging pharmaceutical manufacturers with price fixing and with illegally blocking the market entry of less expensive competitors. Earlier in his career, Mr. Doherty litigated consumer fraud and employment discrimination cases in both state and federal courts in Pennsylvania and New Jersey. He has served on numerous volunteer boards, including Gilda's Club of Delaware Valley and the BCBA Pro Bono Committee, has served as a volunteer instructor for VITA Education Services, and as a pro bono lawyer for the Consumer Bankruptcy Assistance Project.Mr. Doherty is a 1992 graduate of Temple University Law School, where he was senior staff for the Temple Law Review and received several academic awards and is the author of Joint Representation Conflicts of Interest: Toward A More Balanced Approach, 65 Temp. L. Rev. 561 (1992). Mr. Doherty is a 1988 graduate of Dickinson College (B.A., Anthropology and Latin American Studies).
Stephen Doherty
Senior Counsel at Faruqi & Faruqi, LLP
Pennsylvania office
Tel: (215) 277-5770
Fax: (215) 277-5771
E-mail: sdoherty@faruqilaw.com
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