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Attorney General Healey still chasing $16 million for masks that never came

More than two years after Massachusetts paid $16 million for medical masks that never came, state Attorney General Maura Healey is still trying to get the money back.

On Monday, Healey’s office filed a petition in Suffolk County Superior Court to force a Wyoming company, USiDG, to comply with her investigation. According to the filing, the company also has been investigated by federal prosecutors in Boston and New York.

“This company received millions of dollars of state funds for masks it never delivered, and it continues to stonewall our investigation,” the attorney general's spokeswoman Chloe Gotsis said in an emailed statement. “USiDG is not above the law, and we are asking the court to compel the company to answer our basic questions about its unauthorized expenditure of taxpayer dollars.”

USiDG is one of scores of opportunists that jumped into the frenzied medical mask and supply business in the early days of COVID, when states were scrambling to acquire protective gear for frontline workers. According to the attorney general's court filings, the state connected with a New Jersey broker called IDDC Global Brands in March 2020 and ordered 6 million N95 masks, 2 million surgical masks and a supply of hand sanitizer.

Under the deal, the state wired $16.1 million upfront to IDDC’s “paymaster,” Wonder Media Partners Corp. Then, the filing says, “unbeknownst to the Commonwealth,” IDDC arranged days later for USiDG, of Cheyenne, to fulfill $15.2 million in mask orders.

The state fairly quickly became aware of problems related to the contracts and on April 17, 2020, canceled the orders and demanded that its money be returned. But the demand was ignored, Healey's office alleged; USiDG instead continued to place mask orders with the state’s funds.

To date, the state has received $105,000 worth of hand sanitizer and an $18,000 “donation” from USiDG, according to Healey’s filings. The $18,000 came in August 2021, allegedly after USiDG sold a portion of the masks it purchased with the state’s money to third parties.

Jim Sherlock, chairman of the mask broker firm IDDC, which wired the money to USiDG, did not respond to requests for comment.

Brian Kelly, a Boston lawyer representing USiDG, said in a statement the company had no contract with the state. "Without a written contract, the state gave approximately $15 million to a company called IDDC for masks," Kelly said. "IDDC then asked USiDG to get the masks and it did — and it repeatedly offered the masks to the state but the state refused to accept the masks after the state decided to back out of its arrangement with IDDC."

Kelly said the federal probes have been "closed" with no charges filed. The U.S. Attorney's office in Boston declined to comment.

In court filings, Healey, who is running for governor, said USiDG has refused to comply with her investigation, launched in August 2021, and has claimed the attorney general did not have jurisdiction in the matter. The company said it was “voluntarily” producing the same documents for Healey's office that it had produced for federal prosecutors.

But Healey’s office said it didn’t get all the records it requested, and the company has failed to appear for a deposition.

The next scheduled deposition date is Nov. 30. But in July, counsel for USiDG informed the attorney general that the company would not appear, the court records show.


Editor's note: This story has been updated to add a response from USiDG's lawyer.

This article was originally published on October 19, 2022.

Related:

Beth Healy Twitter Senior Investigative Reporter
Beth Healy is a senior investigative reporter for WBUR.

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