Faegre Drinker aids 3M in ending $14.25 billion N95 respirator price-gouging scheme 

A federal case in Indiana seeking to end a fraudulent N95 price-gouging scheme involving the promise of billions of nonexistent respirators has been resolved in federal court with the help of several Hoosier attorneys from one of the state’s largest law firms.   

Lawyers from Faegre Drinker Biddle & Reath represented 3M Co. in the U.S. District Court for the Southern District of Indiana against Nevada-based Zachary Puznak and Zenger LLC, ending the fraudulent scheme.

A man located in Nevada contacted Indiana state procurement managers with an offer to sell 5 billion marked-up 3M masks, according to a USA Today report. Emails from a trademark suit brought by 3M say the man wanted to charge as much as $14.25 billion for a supply of the masks he said were sourced directly from 3M, USA Today reported.

Southern District Court Judge Richard L. Young this week issued a consent judgment, permanent injunction and payment to 3M for donation to COVID-19 charitable relief efforts.

Faegre Drinker partner John Ursu led a multi-office team of business litigation and intellectual property litigators in representation of 3M in the matter, including Indianapolis partners Kathy Osborn and Louis Perry, Minneapolis partner Kerry Bundy, and associates Michael SawersIsaac Hall and Kiera Murphy. 

As part of the resolution of the case, Puznak apologized to the State of Indiana, the public official who was the target of the scheme and to 3M.

“If I understood then what I understand now, I never would have gotten involved in this scheme … I am cooperating and have turned over all my communications with the architects of this scheme to 3M, who will share them with law enforcement. I have also sat for a deposition to tell my story on the record to help educate the public officials, health care administrators, and the general public to ensure they do not fall victim to a similar scheme in the future. I am committed to assisting 3M and law enforcement to see justice served,” Puznak said in a statement.

3M stated that it intends to bring further claims against those Puznak identified as the “architects” of the $14.25 billion scheme to defraud Indiana state officials.

The respirator manufacturer has filed a series of similar legal actions across the United States, including a case filed by Faegre Drinker in Minnesota against Matthew Starsiak, AMK Energy Services LLC and John Does 1 through 10, for ongoing attempts to claim affiliation with 3M, as well as alleged unauthorized use of the company’s famous trademarks to perpetrate a false and deceptive scheme on unwitting individuals and companies during the COVID-19 pandemic.

Faegre Drinker said in a news release 3M is working with national and international law enforcement, state attorneys general, and the largest online retail and tech companies in the world to identify illegal activity and help punish criminals, with the end goal being to prevent fraud before it starts and stop it where it is happening.

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