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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA Nevada company already facing a federal lawsuit in Indiana for efforts to defraud the state into buying respiratory masks the company didn’t have access to is now facing a state-court complaint brought by the Indiana attorney general.
Indiana AG Curtis Hill announced Friday that his office had filed a civil complaint against Zenger LLC and its agent, Zachary Puznak. The complaint alleges Puznak and Zenger tried to convince state officials to buy N95 respirator masks on behalf of manufacturer 3M, while neither Puznak nor Zenger had any connection to 3M.
“The fraudsters tried to pull off their scheme in April of 2020,” Hill said in a news release. “That’s when states across the nation were scrambling to obtain sufficient supplies of personal protective equipment to outfit first responders, health-care workers and essential businesses. Anyone attempting to use such times of crisis for unethical personal gain must be held accountable for their actions.”
Already Zenger and his company have been sued by 3M, which filed suit in April in the Indianapolis Division of the Indiana Southern District Court. Lawyers with the Indianapolis office of Faegre Drinker Biddle & Reath brought the federal complaint on behalf of Saint Paul, Minnesota-based 3M.
The allegations on the federal and state complaints are based on the same set of facts.
On April 14 of this year, Puznak on behalf of Zenger – which does business as ZeroAqua – emailed Luke Bosso and Earl Goode, chiefs of staff to the Indiana Economic Development Corporation and Indiana Gov. Eric Holcomb, respectively. Puzank wrote that he had a “nice Easter gift for you and the State of Indiana.”
That gift was an offer to sell the state 3M N95 masks at a price of $2.82 per mask. He claimed he was also “working to find procurement solutions with the State of Michigan, Connecticut, New York, and Massachusetts.”
Puznak followed up with Bosso 10 days later, this time offering 100 million to 5 billion 3M masks at $2.85 per mask, to be delivered over six weeks. That offer was only good for one day, Puznak wrote, adding that the state’s payment would be transferred directly to 3M by him.
Bosso pushed back, asking for confirmation from 3M that the masks being offered were real. Puznak claimed the offer “was forwarded through two different 3M reps …,” but in reality, 3M’s global production of the masks at the time was 3.9 billion less than what Puznak was offering to sell. Additionally, the prices Puznak quoted were double 3M’s normal price.
Had the state agreed to buy from Puznak, it would have spent $285 million to $14.25 billion, depending on how many masks were ordered.
“Mr. Bosso repeatedly insisted on confirmation from 3M before further discussing the purchase of 3M N95 masks,” the state complaint says. “In response, Puznak emailed Mr. Bosso and stated ‘I don’t think anything is going to satisfy you at this point. And it’s really quite sad. Especially for the people of Indiana. I’ve clearly explained how nobody has time or interest from the company in satisfying the paranoid irrationality of folks exhibiting this level of paranoia. I’m personally insulted that you are essentially calling me a liar. And against the counsel of executives from 3M to just ‘forget it and move on’ I have made every effort to deliver you the reality of the situation and much needed ppe but you refused to deal with reality and like a child insist on conforming to your wishes and your wishes alone. Best of luck managing the states (sic) circumstances. It appears you’re going to need it.”
Even Puznak’s LinkedIn profile indicated he was affiliated with 3M, but Bosso confirmed independently with 3M that neither Puznak nor Zenger LLC had any official connection to the company.
When Bosso told Puznak of this confirmation, Puznak wrote an email saying, “The official 3M brokers I liaise with are relying on me to have a relationship with someone like [sic] built on a semblance of trust … I believe you have a friend who is low level nobody with no influence or knowledge who works at 3M providing you with uninformed opinions. It’s like asking the person peeling potatoes on a nuclear sub how nuclear fission and rocket telemetry works – just because they work on a sub does not mean they are privy to the entire inner working of said vehicle.”
The state complaint includes five counts alleging violations of the Deceptive Consumer Sales Act or the False Claims act, as well as a sixth count of incurable deceptive acts. The AG’s Office is seeking costs and expenses, civil penalties and a permanent injunction prohibiting Puznak and Zenger from:
- Selling or attempting to sell any personal protective equipment, including N95 masks, to any purchaser in Indiana without first notifying the Attorney General’s Office.
- Representing any affiliation with any company they do not have.
- Committing an unfair, abusive or deceptive act, omission or practice in connection with a consumer transaction.
If Puznak or Zenger try to sell PPE in Indiana, they must notify the attorney general who they intend to solicit or sell PPE to in Indiana; where they acquired the PPE, and the specific products and amounts being sold; and whether they currently have possession of the PPE.
The AG’s case will proceed in Marion Superior Court Civil Division 13, where Judge James Joven presides. The case is State of Indiana v. Zachary Puznak, Zenger LLC, 49D13-2012-PL-043285.
As for the federal case brought by 3M, Judge Richard Young entered a consent judgment and permanent injunction in July.
The injunction prohibits Puznak and Zenger from “(u)sing the 3M Marks (or any other mark(s) confusingly similar therefor) for, on, and/or in connection with the manufacture, distribution, advertising, promoting, offering for sale, and/or sale of any goods or services, including, without limitation, 3M-brand N95 respirators Marks.” They are also prohibited from “(f)alsely representing themselves as being distributors, authorized retailers, and/or licensees of 3M and/or any of 3M’s products (including, without limitation, 3M-brand N95 respirator) and/or otherwise falsely representing to have an association or affiliation with, sponsorship by, and/or connection with, 3M and/or any of 3M’s products.”
Puznak and Zenger were also ordered to “immediately destroy any unauthorized goods and materials within the possession, custody, and control of Defendant that bear, feature, and/or contain any copy or colorable imitation of 3M’s Marks.”
The 3M complaint also named unknown individuals listed as John Does 1-10 as defendants. The July judgment notes that 3M intends to file an amended complaint naming parties listed as the John Does as defendants.
The federal case is 3M Company v. Puznak, et al., 1:20-cv-1287.
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