A Mississippi businessman was charged with defrauding the United States and other health care providers in a $1.8 million scheme related to acquiring and hoarding personal protective equipment (PPE) and price gouging health care providers, including numerous U.S. Department of Veterans Affairs (VA) hospitals in critical need of PPE.
Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Darren J. LaMarca, Acting U.S. Attorney of the Southern District of Mississippi, Michelle A. Sutphin, Special Agent in Charge of the FBI’s Jackson, Mississippi Field Office, Jeffrey A. Breen, Special Agent in Charge of the VA Office of Inspector General (OIG) South Central Field Office, and Jack Stanton, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI), New Orleans Field Office made the announcement.
Kenneth Bryan Ritchey, 57, of Ocean Springs, Mississippi, was charged in an indictment in the Southern District of Mississippi with conspiracy to commit wire fraud and mail fraud, conspiracy to defraud the United States, conspiracy to commit hoarding of designated scarce materials, and hoarding of designated scarce materials. The defendant made his initial appearance today before U.S. Magistrate Judge Robert Myers of the Southern District of Mississippi.
The indictment alleges that after the first U.S.-confirmed case of COVID-19, Ritchey participated in a scheme to defraud health care providers, including the VA, of more than $1.8 million by acquiring PPE and other designated materials from all possible sources, including home improvement stores and online retailers, and ultimately hoarding the same. The indictment alleges that due to nationwide PPE shortages and COVID-19-related fears, Ritchey directed sales representatives to solicit health care providers, including the VA, to purchase PPE and other designated materials at excessively inflated prices through high-pressure sales tactics and through misrepresenting sourcing and actual costs. It is alleged that Ritchey sold PPE to health care providers desperate to acquire the same at incredible markups. For instance, the indictment alleges that Ritchey sold N-95 masks to the VA and other health care providers for as much as $25.00 per mask, despite acquiring such masks at much lower prices.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI’s Jackson Field Office, VA-OIG, and ICE HSI. Principal Assistant Deputy Chief Dustin M. Davis and Trial Attorney Sara E. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kathlyn R. Van Buskirk of the Southern District of Mississippi are prosecuting the case.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for approximately $19 billion. In addition, the Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS-Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The public is asked to report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s (NCDF) National Hotline at (866) 720-5721 or visit The Department of Justice’s NCDF website.
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January 28, 2021 at 03:29AM
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Businessman Charged in Scheme to Hoard Personal Protective Equipment and Price Gouge Health Care Providers - Department of Justice
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