Attorney General Phil Weiser announced on Monday that his office has reached its first settlement under an anti-price-gouging law passed in 2020.

The settlement, with Denver-based Nationwide Medical Supply Inc., states that the business “made misleading claims about the masks and respirators it sold and charged unreasonably excessive prices for those products during the COVID-19 public health emergency.”

Nationwide began selling personal protective equipment in April 2020, the same month the company filed its business incorporation documents in Colorado, according to the Secretary of State’s office. The company says it has offices in Denver, Florida and Utah and warehouses in Florida, Los Angeles and Denver.

The company CEO and founder Jon Lewis has been a vendor and promoter of trade shows for the past 20 years, under the name Nationwide Expos.  The company told Colorado Politics it had hired a consultant with medical supplies experience to assist with its PPE sales.

“During a public health emergency, Coloradans and Colorado businesses need to be able to trust that the potentially life-saving products they are purchasing are as advertised,” Weiser said in statement released Monday. “We must hold irresponsible businesses accountable for deceptive practices, especially those that have the potential to cause direct harm to consumers.”

Weiser’s statement said the company made “false and misleading claims about those supplies,” such as:

• Marketing a KN95 mask as an N95 respirator;
• False claims that a KN95 mask had a “510(k) number for the medical market”;
• False claims that an N95 respirator and a KN95 mask were “FDA/CE approved”; and
• Use of the FDA logo in violation of applicable law.

A state test of the filtration of two masks the company sold found that while one mask performed at the advertised 95% removal filtration, the second did not meet the advertised filtration level, testing instead at approximately 70%, according to the Attorney General’s statement.

The Attorney General’s office also alleged Nationwide Medical engaged in price-gouging. Under House Bill 20-1414, companies are prohibited from the practice during public emergencies.

That law covers price gouging for building materials, consumer food items, emergency supplies, fuel, medical supplies and other necessities, repair or reconstruction services; transportation, freight, or storage services; or services used in an emergency cleanup.

“Nationwide sold masks for a markup that in some cases exceeded 250% of Nationwide’s costs in obtaining the masks. In at least one instance, the company authorized salespeople to negotiate prices with Nationwide’s customers and offered the salespeople a commission based on their ability to sell masks to ‘Medical and Government’ purchasers for higher prices,” the Attorney General’s statement said.

As part of the settlement, the company agreed to stop making false or misleading representations about the masks or respirators it markets and sells, and to ensure the equipment it sells and the certificates attached to the equipment are authentic and valid.

The company also agreed to pay $70,000 to the state to cover attorneys fees and restitution, if any, and to stop charging excessive and unreasonable prices during the pandemic.

In a statement to Colorado Politics, Nationwide said the Attorney General’s office began investigating the company in April 2020, the same month it filed its incorporation papers with the Secretary of State.

“Having nothing to hide, Nationwide invited the Attorney General’s investigators into its offices and provided them with unfettered access to Nationwide’s business accounts, as well as documentation regarding Nationwide’s sale of personal protective equipment.  Ultimately, following a months-long investigation, the Attorney General’s office alleged that on limited occasions, information published on Nationwide’s website regarding certain PPE was not entirely accurate.

“Nationwide vehemently denies the Attorney General’s allegations, but further notes that even if true, the allegations establish only that Nationwide reproduced information provided to them, and did not intentionally mislead the public.

“Nationwide’s goal has and always will be to make PPE available to the general public during the global COVID-19 pandemic, and to ensure that its customers receive the type and quality of PPE required for their intended use.  Accordingly, rather than expending valuable time and resources fighting the Attorney General’s allegations in court, Nationwide has instead elected to apply those resources to (a) improving its due diligence policies and procedures; and (b) continuing to be a trusted source of crucial PPE.

“Nationwide further highlights that as part of the Assurance, it gladly agreed to continue working with the Attorney General’s office in an effort to further establish the public’s trust.”

In August, Weiser told the National Law Review that his office has seen “historic” levels of price gouging complaints.

“The Attorney General said he did not plan to take action on every complaint, but multiple complaints about the same company will be more likely to prompt an investigation,” the article said.