ALLENTOWN – A lawsuit accusing a chain of other companies and individuals of conspiring to provide them with inauthentic equipment and violating the Racketeer Influenced Corrupt Organization (RICO) Act was recently settled.
IM Border Group, LLC of Reading first filed suit in the U.S. District Court for the Eastern District of Pennsylvania on March 25, 2021 versus PY&F Enterprises, Inc., Yossi Flax and Elie Flax of Toms River, N.J., Singh & Daughters, LLC and Mandeep Singh of Henderson, N.V., Solaryna Energy and Frank Sawaf of Corona, Calif., plus Tesla Energy and David Hijorth, of North Richland Hills, Texas.
IMBG is engaged in the interstate purchase and sales of PPE, which according to the company, “must be manufactured to strict tolerances to protect the health, safety and welfare of the people who ultimately utilize these items to protect themselves and others from infectious diseases, including COVID-19.”
IMBG also requires that the PPE “be verified by its providers as having been manufactured, guaranteed and warranted by approved companies, such as 3M.”
From October through December of 2020, IMBG purchased, on three separate occasions, “Authentic 3M 1860 N95 masks”, in some instances utilizing purchase orders to the enterprise defendant P&YF Enterprises, Inc.
The suit said that the allegedly authentic masks were purchased from defendant P&YF Enterprises, Inc. on Nov. 10, 2020, Nov. 19, 2020 and Dec. 29, 2020. At purchase time of the allegedly authentic masks, plaintiff IMBG wired funds in the amount of $68,535 on Nov. 10, 2020, $63,800 on Nov. 19, 2020, $160,000 on Nov. 20, 2020 and $31,752 on Dec. 29, 2020.
“Shortly after the third purchase of the allegedly authentic masks, plaintiff was informed by one of its customers that the lot numbers of the N95 masks that had been delivered to that customer had been independently identified as fake and fraudulent. Upon review by plaintiff, it was discovered that all three of the purchases of the allegedly authentic masks were designated by defendants to have been manufactured in the same lot number, which had been identified as fake and fraudulent by the 3M Company,” the suit stated.
“Upon discovering that the allegedly authentic masks that had been purchased were fake and fraudulent, plaintiff contacted P&YF Enterprises, Inc. to ascertain whether defendant could evidence that they were, in fact, authentic. Despite multiple inquiry by plaintiff, P&YF Enterprises, Inc. was unable and/or refused to verify the authenticity of the allegedly authentic masks.”
The suit alleged that upon further investigation, the plaintiff “discovered that P&YF Enterprises, Inc. was part of a nationwide organization that was counterfeiting and selling fake and fraudulent 3M 1860 and 1860S N95 masks.”
“Upon further investigation, plaintiff uncovered the fact that P&YF Enterprises, Inc. had obtained the allegedly authentic masks from Tesla Energy; who had obtained the allegedly authentic masks from Singh & Daughters LLC, who had obtained the allegedly authentic masks from Solaryna Energy,” per the suit.
“Upon discovery that the masks were not authentic, plaintiff notified its customers to prevent any harm from occurring from their use. To the best of plaintiff’s knowledge, none of the allegedly authentic masks were used prior to the discovery that they were fake or fraudulent.
UPDATE
After more than a year of subsequent litigation through amended complaints and subsequent motions to dismiss for alleged failure to state claims upon which relief could be granted, it was reported on April 25, subsequent to a conference on the matter, that the parties arrived at a confidential settlement the prior month.
“After a settlement conference with the Hon. Magistrate Elizabeth T. Hey, plaintiff I M Borden Group, LLC and defendants P&YF Enterprises, Inc., Yossi Flax, and Elie Flax have agreed to resolve all claims, counterclaims, and third-party claims of this litigation under certain confidential terms,” the stipulation of voluntary dismissal said.
“While the parties agreed to keep the terms confidential, performance of all obligations under the parties’ settlement agreement shall be completed within seven months of this filing. The parties respectfully request that this Court retain jurisdiction over this matter for seven months for the sole purpose of enforcing the settlement agreement, if necessary; and hereby respectfully request that unless otherwise notified by the parties hereto, the Court dismiss this matter and all claims herein with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii) upon the expiration of said seven months, or on Oct. 15, 2022.”
The plaintiff was represented by Joseph A. Caprara of Caprara Law, in Radnor.
The Flax defendants were represented by Kevin Kehrli of Garson Segal Steinmetz Fladgate, in New York, N.Y.
U.S. District Court for the Eastern District of Pennsylvania case 5:21-cv-01426
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com