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A Car Salesman, a Macedonian Ex-Minister and a $45 Million Mask Scheme

Prosecutors charged a New Jersey man who was part of an unlikely crew that sought a lucrative deal to provide desperately needed protective equipment.

It is an unlikely cast of characters for a multimillion-dollar municipal procurement drama, even given the chaos generated by the deadly coronavirus pandemic.

There is a used-car salesman from Manalapan, N.J.; the former minister of foreign investment for Macedonia; and the head of a publicly traded company that plans to transform medical waste into energy in Rhode Island. And then there is the holder of a patent on a device designed to detect damaged parcels.

More unlikely still, they seem to have limited experience in municipal contracting, or in obtaining, trading, or shipping what documents and people with knowledge of the matter say they were trying to sell to New York City: millions of 3M-brand N95 respirators that the city desperately needed for health care workers, police, paramedics and others.

So, it is perhaps not surprising that the deal — like many these days, as federal, state and local governments, along with health care providers, vie for precious protective equipment — ended badly, falling apart before any masks or money changed hands.

What is surprising, however, is just how badly it ended for the used car dealer, Ronald J. Romano. Mr. Romano, 58, was arrested early on Tuesday morning at his Manalapan home, charged with wire fraud and wire fraud conspiracy in a three-count criminal complaint unsealed in United States District Court in Manhattan.

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Ronald J. Romano

The complaint accuses him of an audacious $45 million scheme to defraud and price-gouge the city as cases of Covid-19 were skyrocketing.

It says he posed as an authorized 3M dealer and offered to sell the city seven million masks at a more than 400 percent markup from their list price. He was also charged with conspiring to violate the Defense Production Act, a misdemeanor.

The charges come as the deadly pandemic has spawned a vast shadowy network of people who traffic in the lifesaving personal protective equipment, or P.P.E., which is sometimes the only thing that stands between health care workers and the deadly virus that causes Covid-19.

With contagion and the death count ballooning worldwide, the number of scammers taking advantage of the frenzied multibillion-dollar market for the gear has also risen.

Last month, a Georgia man was charged with fraud after attempting to sell 125 million nonexistent respirator masks to the government, and two men in Southern California were charged with trying to sell a phantom stockpile of 3M face masks for $4 million, prosecutors said.

In New York City, Mr. Romano was not the only man charged on Tuesday. Federal authorities also accused Richard Schirripa, a pharmacist who once owned a drugstore on Madison Avenue, of selling thousands of N95 masks to doctors and funeral directors at a 50 percent markup, often out of the trunk of his car. “This stuff is like gold right now,” a criminal complaint quoted Mr. Schirripa saying to an undercover agent.

The charges against Mr. Romano were announced by Geoffrey S. Berman, the United States attorney for the Southern District of New York, and Margaret Garnett, the city’s Department of Investigation commissioner.

A lawyer for Mr. Romano, Mark A. Macron, said he was still reviewing the complaint and was not yet prepared to comment.

Late Tuesday afternoon, Mr. Romano appeared by video teleconference before United States Magistrate Judge Ona T. Wang and was released on a $200,000 bond.

The investigation started last month after 3M filed a federal lawsuit against Mr. Romano’s company, Performance Supply LLC, accusing it, among other things, of falsely claiming to be an authorized distributor of the highly sought-after 3M masks.

A few days later, federal agents showed up at Mr. Romano’s home with a search warrant to seize his phone, according to people with knowledge of the matter.

The 25-page criminal complaint against Mr. Romano refers to several co-conspirators and “brokers” involved in P.P.E. deals. The document does not identify them by name, but it does provide details that make their identities clear, and those were confirmed by a person with knowledge of the case.

No one else had been charged on Tuesday or had been accused of any wrongdoing. The investigation is continuing, law enforcement officials said.

The complaint, however, paints a damning picture of Mr. Romano’s efforts to procure and sell equipment he was not authorized to sell, with the help of his co-conspirators and the brokers.

On March 22, while listening to a White House news conference, Mr. Romano exchanged text messages with one of his co-conspirators, writing that the government’s crackdown on people hoarding supplies was “not promising for us.”

“Going after brokers,” Mr. Romano wrote in a text that misspelled some words. “If your hoarding medical supplies come forward with fair price and they will pay. If not we will get you.”

The co-conspirator wrote back: “We are not hoarding we are producing and selling as produced.”

Some aspects of the roles others played in the scheme have been pieced together through details from the complaint, interviews with people with knowledge of the events leading up to the failed deal and emails about it and other proposed transactions that were reviewed by The New York Times.

One person identified as a co-conspirator in the complaint, based on the details provided, is Gligor Tashkovich, the former minister of foreign investment for Macedonia who has worked in the financial services industry and is currently with a company called D.A. International Group., according to his LinkedIn profile.

Mr. Tashkovich was involved in discussions with Mr. Romano about selling masks to the city, documents and the people familiar with the case say.

On March 24, for instance, Mr. Tashkovich sent an email to Mr. Romano under the subject line “thoughts on New York City order” and referred to “the fact that this expected incoming purchase order is from the City of New York” and said “I think this will be the secret sauce that could get them to prioritize this.”

Adam S. Kaufmann, a lawyer for Mr. Tashkovich, said his client was not part of any fraudulent scheme and had cooperated with the government’s investigation, voluntarily providing information and materials.

“Mr. Tashkovich trusted an unscrupulous supplier to whom he was introduced by a close friend,” Mr. Kaufmann said. “Ultimately, Mr. Tashkovich walked away from the deal before any funds changed hands when the supplier refused to provide the information requested.”

Another man identified as a “broker” in the complaint, based on the details provided, is Auguste Jacques, the head of 3BP, Inc., a company that holds the patent for technology to determine whether a package has been damaged in shipping.

Mr. Jacques, who did not return telephones calls from a reporter, also contacted the city during the negotiations over the mask deal, documents show. On March 24, according to the emails, Mr. Jacques wrote to the same city procurement official that Mr. Romano had contacted when he falsely claimed to be a authorized dealer.

The characters described in the complaint also appear to include Nicholas B. Campanella, a New Jersey businessman who is the chief executive officer of Sun Pacific Holdings Corp., the company whose subsidiary plans to convert medical waste to energy, people familiar with the matter said.

A person who based on the details provided is Mr. Campanella sought to obtain masks from several sources and helped Mr. Romano create a document on the letterhead of one of Mr. Campanella’s companies, falsely claiming Performance Supply was authorized to sell 3M products, the complaint said.

Mr. Campanella denied any role in the procurement deal on Monday, saying he had only put Mr. Romano in touch with a hedge fund that had masks. “I did not make any offerings or any documentation to offer anything to New York City,” he said. He did not respond to telephone messages on Tuesday after the criminal complaint was made public.

“It was a lot of innuendo and accusations for something that never actually happened or transpired,” he said on Monday.

Alan Feuer contributed reporting.

William K. Rashbaum is a senior writer on the Metro desk, where he covers political and municipal corruption, courts, terrorism and broader law enforcement topics. He was a part of the team awarded the 2009 Pulitzer Prize for breaking news. More about William K. Rashbaum

A version of this article appears in print on  , Section A, Page 12 of the New York edition with the headline: Used Car Salesman Charged in $45 Million Scheme to Sell N95 Masks. Order Reprints | Today’s Paper | Subscribe

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