A Maryland-based company will pay $550,000 to resolve claims it illegally misled the MBTA to purchase tens of thousands of dollars worth of hand sanitizer that was fake, according to Attorney General Maura Healey's office.
In March, Federal Resources Supply Company sent the MBTA a marketing email claiming the product "Theraworx Protect" sanitizes in a “30-second flash and provides a 6 hour prolonged effect” to fight off the coronavirus, Healey's office said.
Relying on these false claims, the MBTA made three large purchase orders totaling about $1.7 million, and employees used some of the product. But it contained no alcohol, a key ingredient cited by health officials for killing germs during the coronavirus pandemic. The Centers for Disease Control and Prevention recommends using hand sanitizers with at least 60% alcohol content as an alternative if soap and water are not available.
“This company’s reckless and deceptive actions put the health of our frontline workers and the public at even further risk during this unprecedented public health crisis,” Healey said in a statement. “We took action against this company because their attempt to exploit people during the COVID-19 pandemic for their own profit was not only unacceptable, it was illegal."
As part of the agreement, Federal Resources will credit the MBTA $150,000 (the value of the product it used) and pay $400,000 to the state's general fund, based on a court document filed in Suffolk County Superior Court. The company will also pick up the remaining product that is still in MBTA's storage facility.
MBTA General Manager Steve Poftak said he's grateful to Healey's office for recovering the cost spent by the transit agency on the ineffective hand sanitizer.
“The safety of our employees is a top priority, and it’s shameful that, during a pandemic, a vendor would make false claims about a product’s effectiveness,” Poftak said.
Theraworx Protect is manufactured by Asheville, North Carolina-based, Avadim Health, which is still under investigation by Healey's office.
Federal Resources has agreed not to market or sell the product to Massachusetts agencies and will not claim that it is effective against COVID-19. The company had no immediate comment, but stated in court documents it "neither admits nor denies the AGO's allegations."
The sanitizer sale is only the latest example of fake or low-quality protective products being peddled since the pandemic started.
The AG is investigating several companies, including IDDC Global Brands, to which the state paid $905,000 for masks that never arrived.