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Shark Tank star Daymond John is accused of trying to take advantage of the coronavirus pandemic by hiking the market price of face masks.
Hiking the price of essential products that are in short supply is known as price gouging. It is illegal and punishable by prison time and a hefty fine.
According to the Miami Herald, John tried to hawk N95 face masks for $7 million.
John, CEO of the Shark Group, offered to sell the masks at $7 each - more than three times the market rate per mask.
"This was not somebody off the street, this was Daymond John," said Jared Moskowitz, director of the state Department of Emergency Management.
"He came to me and said, 'I've been in the clothing business. I have connections with factories in China,'" Moskowitz told the newspaper.
Desperate to get the supplies, the state agreed to pay John $7 million for 1 million face masks, the Miami herald reported.
The state signed the purchase order on March 25 with the law firm, Foley & Lardner handling the transaction, according to the paper.
By mid-April, the multi-million-dollar deal fell through, as John was unable to deliver the masks.
"Many people were duped," Moskowitz said.
Shark Group's deal is among many fraudulent deals being investigated by the 3M company for price gouging, the Herald reported.
A rep for Shark Group did not respond to the newspaper's request for comment.
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The government stepped in after two Tennessee brothers were accused of attempting to sell 17,000 bottles of hand sanitizer for $70 each during the coronavirus outbreak.
Matt and Noah Colvin thought they would make a killing when they attempted to sell 17,000 bottles for $70 each on Amazon.com. But Amazon blocked the sale, and the brothers were stuck with 17,000 bottles that they couldn't unload.
The Colvin brothers bragged that they were making "crazy money" online. They told reporters they drove 1,000 miles all over Kentucky and Tennessee buying bottles of hand sanitizer and other anti-viral products to take advantage of the pandemic.
The government asses stiff fines and jail time to lawbreakers who enrich themselves through price gouging during shortages.
After the government stepped in and opened an investigation into price gouging, the brothers quickly donated the 17,000 bottles.
CrimeOnline.com went to the brothers' storage unit and observed the Tennessee state's attorney's office carting off the bottles and supplies. The AG's office made multiple trips to the storage unit to haul most of the bottles off.
According to NBC3, the brothers donated the remaining bottles to a local church.
Samantha Fisher of the Tennessee Attorney General's office said the brothers still face a hefty fine for price gouging. The fine might wipe out their "crazy" earnings.
Last week, I was filling up my car at a RaceTrac gas station in Buckhead when I noticed a local TV news crew interviewing a customer at the next pump. At the time I had no clue that Atlanta was in the midst of a gas shortage. I didn't notice any long lines or fistfights at the pumps that day. Well, that might change this week as local gas stations run out of gas.
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