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Santa Monica Woman Pleads Guilty to Hoarding and Price Gouging Mask Scheme

Bob Kronovetrealty
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By Jorge Casuso

January 5, 2021 -- A Santa Monica spa owner charged with hoarding surgical masks and selling them at greatly inflated prices during the coronavirus pandemic pleaded guilty Tuesday in Los Angeles federal court.

Niki Schwarz, the 55-year-old Santa Monica resident and owner of Tikkun Holistic Spa, pleaded guilty during a morning video conference to one misdemeanor count of hoarding and price gouging, according to the U.S. Attorney's Office.

The offense carries a statutory maximum sentence of one year in federal prison, federal officials said.

Schwarz admitted in an October plea agreement that she began accumulating N95 respirators in February "in anticipation of a shortage that would be caused by a global pandemic resulting from the spread of the novel coronavirus," prosecutors said.

Between early February and the end of June, Schwarz accumulated nearly 20,000 N95 masks manufactured by 3M with a list price ranging from $1.02 to $1.27 and by Alpha Pro with a list price of 86 cents.

Schwarz then resold the masks for as much as $15 each, according to the plea agreement.

She did so "with knowledge that masks had been designated as scarce materials and with knowledge that accumulation of the designated materials to resell in excess of prevailing market prices was unlawful,” the plea agreement states.

In March, the U.S. government designated N95 respirators as “scarce materials” under the Defense Production Act of 1950 "due to the overwhelming need of health care providers dealing with COVID-19 patients to use personal protective equipment," prosecutors said.

Schwarz continued selling the masks after an associate informed her on March 1 that she was going to stop selling them because she believed it was crime that could result in one year in prison.

Schwarz is scheduled to be sentenced on May 6 by U.S. Magistrate Judge Jean P. Rosenbluth.

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