Press Release  Salem Company to Pay $3.5 Million for False Claims About Its Ability to Refund the State for Masks Not Delivered During COVID-19 Pandemic

BOSTON — A Salem-based limited liability company has agreed to pay $3.5 million to settle allegations that it made repeated false statements in connection with its obligation to refund the state for more than 900,000 face masks it failed to deliver during the pandemic in accordance with its contract, Attorney General Maura Healey announced today.

 The AG’s Office alleges that in April 2020 the state’s Operational Services Division (OSD) signed an emergency purchase order with Bedrock Group LLC for one million N95 masks for $3.6 million. The state made the purchase after it was contacted by the company’s president with an offer to supply the masks, which the president said would come from a reputable manufacturer in China. The purchase order stated the masks were to be shipped to the state in mid-April, but the state terminated the order in June after receiving only 99,600 of the one million masks it ordered. According to the AG’s Office, for the next six months, Bedrock repeatedly acknowledged its obligation to refund the state but failed to do so, and in January Bedrock sent a $750,000 check to the state that was returned for insufficient funds.

“This company tried to take advantage of the state by holding onto millions of taxpayer dollars it owed for masks that it never delivered,” AG Healey said. “The state relied on this order to provide life-saving masks during the COVID-19 pandemic. This settlement requires Bedrock to return the more than three million dollars it owes the state and to pay a significant penalty for its false statements.” 

“A key component of the Commonwealth’s historic response to the COVID-19 pandemic included acquiring and distributing millions of pieces of PPE to individuals, first responders, and front line healthcare personnel,” said Assistant Secretary for Operational Services Gary Lambert. “In an effort to continue protecting critical state resources throughout this extraordinary effort, the Operational Services Division identified problems associated with Bedrock’s contract obligations and notified the Attorney General’s Office, with whom we were happy to collaborate to recoup funds for the Commonwealth and its taxpayers.”

The assurance of discontinuance filed in Suffolk Superior Court today settles allegations that the Bedrock Group LLC violated the Massachusetts False Claims Act by failing to provide the state with the full refund it rightfully owed the state, and by providing false statements in connection with its obligation to repay those funds.

In addition to returning the $3.2 million it owes to the state, Bedrock has agreed to a $250,000 payment for false claims penalties and a voluntary debarment from contracting with the state or any political subdivision for five years.

During the public health crisis, AG Healey’s Office has been focused on protecting the state, workers, and consumers from fraud related to the COVID-19 pandemic. In November, the AG’s False Claims Division reached a $550,000 agreement with a Maryland-based company for falsely marketing and selling to the Massachusetts Bay Transportation Authority a product claiming to be an effective hand sanitizer alternative to prevent the spread of COVID-19. In January, the AG’s False Claims Division reached a $1 million settlement with Colonial Automotive Group Inc. to settle claims that it encouraged employees it furloughed in compliance with the state’s mandated closure of car dealerships during the pandemic to apply for unemployment benefits, and then required them to continue to work without pay.

This matter was handled by Assistant Attorney General Sean Hildenbrandt of AG Healey’s False Claims Division, with assistance from False Claims Division Chief Amy Crafts and Colleen Frost of the AG’s Civil Investigations Division. 

The False Claims Division was created by AG Healey in 2015 to safeguard public funds and promote integrity and accountability in public contracting. AG Healey urges anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds to contact the False Claims Division’s tip line at 617-963-2600.

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