SALEM — More than a year after promising to repay the state more than $3.4 million for N95 masks that were never delivered, a Salem-based business is facing new legal action by outgoing Attorney General Maura Healey.
Funds that Bedrock Group was supposedly trying to get refunded by a purported Chinese supplier were actually being transferred to the company’s officers and members of their families, and being used to finance casino junkets, furniture purchases and $3,000 for Uber Eats.
Bedrock Group, which had been a corporation established in Utah but with offices on Pickering Wharf, reached out to state officials in April, 2020, offering to obtain the protective masks from what it claimed was a reputable seller in China.
The state paid Bedrock $3.6 million for one million masks.
But by June 11, the state had received fewer than 100,000 of the masks it had ordered. Officials asked Bedrock for a $3.4 million refund.
After months without any response, the state went to court that November. That’s when Bedrock contended that it had sent a $750,000 check and was working on getting a refund from the purported Chinese supplier.
The firm then sent what it claimed was a replacement check — which bounced.
Eventually, the firm agreed in June, 2021 to repay the funds on a schedule, with the first payment due that month and the remaining payments spread out over the following seven months.
But in a new lawsuit filed Monday in Suffolk Superior Court, Healey’s office alleges that instead of working on repaying the funds and an agreed-to penalty, the officers of the company doled out the money among themselves.
The suit names Bedrock Group LLC, owners Bedrock Consulting, Anthony Damore, lawyer Jonathan Roth, Enrique Sperling and Howard Sperling.
The AG alleges that the business and its owners and officers “made repeated false claims to the Commonwealth for more than two years concerning their intentions and efforts” to return the funds.
“During the height of the pandemic, when the country was facing a shortage of N95 masks, this company and its owners took millions of dollars from Massachusetts for much-needed PPE only to enrich themselves,” Healey said in a press release. “We are suing to hold Bedrock and its owners accountable for their deceit and to get taxpayers their money back.”
The suit alleges that the company violated the 2021 agreement.
The state is still owed $3.35 million, but is now seeking triple damages, additional civil penalties, and attorneys fees.
Healey’s office noted that it has pursued several other individuals and firms it says took advantage of the pandemic to profit, including a $1 million settlement from a South Shore auto dealership that had reported workers as furloughed, enabling them to collect unemployment benefits, while they were still being told to report to work.
They also pointed to a $500,000 agreement with a Maryland company that falsely marketed a product as an effective hand sanitizer to the MBTA, and a lawsuit against another company, in Illinois, that was selling the same product to school districts, including Swampscott.
Courts reporter Julie Manganis can be reached at 978-338-2521, by email at email@example.com or on Twitter at @SNJulieManganis