SALEM — A Salem business that was paid nearly $3.6 million for what amounted to just under 100,000 N-95 masks last year has promised to repay the state in an agreement with the Attorney General's office filed Tuesday in Suffolk Superior Court.
Bedrock Group, which has offices on Wharf Street but is incorporated in Wyoming, reached out to the state's Operational Services Division in April, 2020, as officials were in a desperate search for protective equipment in the early weeks of the coronavirus pandemic.
The company, according to the AG's filing, told officials that it had a connection to a "reputable" mask maker in China. Under an emergency purchase order, the state paid Bedrock $3.56 million for what was supposed to be one million masks that would arrive by April 23.
But by June 11, just 99,600 of the masks had arrived, according to the filing.
State officials demanded a refund. When no money had been repaid by November, the state sent a demand letter, according to the filing.
Bedrock, in response, claimed that they had sent the state $750,000 and that it was working with their supplier to get a refund for the rest.
State officials say they did not receive any funds, however, and sent another demand letter. This time, Bedrock responded by sending a photocopy of a check for $750,000, then the actual check. That check bounced, state officials said.
In the agreement, Bedrock has agreed to pay the state for the value of the masks that were not provided, plus a $250,000 penalty, for a total of $3.45 million.
The money is scheduled to be repaid in eight monthly installments through January. The first two payments, for June, are $150,000 and for July, $100,000, followed by six more payments of $534,237 a month.
The firm has also been barred from entering into any public contracts in Massachusetts for five years.
However, Bedrock "neither admits nor denies" the allegations in the filing and entered the agreement solely to "settle" the matter, according to the filing.
The principal of the firm, Salem attorney Jonathan Roth, did not immediately respond to an email Wednesday seeking comment. He did email a Boston news station that had been provided a press release on the settlement by the attorney general's office on Tuesday, in which he said that his firm was asked for additional fees beyond the original agreement with the Chinese supplier and that he's been trying to obtain a refund since then.
Attorney General Maura Healey's office said in a statement provided to The Salem News on Wednesday that Roth's firm took advantage of the state and its taxpayers "by holding onto millions of taxpayer dollars it owed for masks that it never delivered."
"The state relied on this order to provide life-saving masks during the COVID-19 pandemic," said Healey.
The release also touted the office's past efforts to identify pandemic-related fraud, including settlements with a Maryland company that sold ineffective hand sanitizer to the MBTA and with an auto dealership group that had its employees apply for unemployment assistance while continuing to work without pay.
Courts reporter Julie Manganis can be reached at 978-338-2521, by email at email@example.com or on Twitter at @SNJulieManganis.