The federal government and states have fueled an unregulated, chaotic market for masks ruled by oddballs, ganjapreneurs and a shadowy network of investors.
by J. David McSwane June 1, 5 a.m. EDT
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It was 10 p.m. on a Tuesday, and I was watching footage of secret stockpiles of N95 masks, so-called proof-of-life videos sent to me by strangers, when Tim, the juicer salesman, called.
“My name is Tim, and I heard you’re looking into VPL,” the man said in a squeaky, nervous timbre. “I distanced myself from the company because they weren’t delivering what they said.”
A few hours earlier, I had called the owner of VPL Medical LLC, a company outside Los Angeles that had gotten a $6.4 million contract from the Department of Veterans Affairs to supply 8 million three-ply surgical masks to hospitals dealing with the COVID-19 crisis. My call freaked them out, Tim said, and someone at the company had passed my number along to him.
What was his interest in the story, I asked.
“I went and got myself $8,000 in cash. I was on my way with the money in a briefcase…,” he began.
Note: If you develop emergency warning signs for COVID-19, such as difficulty breathing or bluish lips, get medical attention immediately. The CDC has more information on what to do if you are sick.
I had called VPL because records showed the company incorporated just four days before it won the VA deal, and it went on to win another $14.5 million no-bid contract the next day from the federal office in charge of the national stockpile. Its new website featured a photo of the sort of “ear loop” mask the federal government has since branded as ineffective Chinese knockoffs. The moniker stands for Viral Protection Labs, but the labs exist only in the stock art chosen for the website.
Before forming the company to exclusively sell medical supplies, VPL’s owner operated Rock On IT, a company specializing in search engine optimization and digital marketing. Both companies were registered to the same unit in an office park in Rancho Cucamonga, about an hour from LA.
Tim, whose last name is Zelonka, said he had driven halfway to that office park from West Hollywood with his briefcase stuffed with cash when his deal to buy a relatively small amount of masks from VPL fell through. He said he thought perhaps he had asked too many questions of a company representative — about where the masks were sourced, if they were kept in sanitary conditions and about the company’s credentials.
“He said: ‘They’re not in boxes. They’re in Ziploc bags,’” Zelonka said, recounting his conversation with VPL’s representative. “And I said: ‘That’s not what you’re advertising. You’re advertising made in the U.S.A. and in sealed packaging.’”
That’s when Zelonka said the deal was abruptly canceled by the representative, whom I’d later learn was sued by the Federal Trade Commission in 2018 for a robocalling scheme that involved bogus smoking cessation treatments and sexual performance enhancement pills.
VPL’s owner, Bobby Bedi, said his company has delivered on its contracts and is providing good products during an unprecedented crisis. He dismissed fraud allegations against him and an associate as inevitable hiccups in doing business. He also denied that Ziploc bags were used to store his masks, which are much cheaper and less effective than N95s at stopping the spread of the virus.
“VPL does not and has not ever delivered finished goods in repackaged materials,” he said.
Zelonka attempted to do business with VPL in April, as the company brokered its deal with the VA, whose massive hospital system had been overrun by the coronavirus pandemic. In desperate need of supplies, the VA has signed more contracts without competitive bidding than any agency other than the federal government’s central contracting office.
Like so many in the emerging underground mask business, Zelonka had no background in the medical supply chain. He handled U.S. distribution for a Spanish commercial juicer company, whose equipment can hold dozens of whole oranges and allows users to make custom selections and watch the machine pluck, press and pound out juice. He had been furloughed, so he thought maybe he could make money as a PPE broker, connecting buyers to sellers on a black market fueled by desperation and opportunism, a Wild West occupied by oddballs, ganjapreneurs and a shadowy network of investors.
Zelonka’s plan was more novel than the dozens I had heard in recent weeks from other brokers over meandering phone calls, cryptic Twitter messages and dispatches sent through Signal, an encrypted texting app. He hoped to sell masks, gowns and gloves for food service workers at places like Jamba Juice, which were reopening as states lifted stay-at-home orders — a cottage industry within a cottage industry.
He wanted to make a modest profit, Zelonka said, while remaining ethical.
He said he’d been meeting other mask suppliers, working out cash deals, and that he’d be happy to show me his world. He said he might set up another meeting with VPL to get a look at its product.
“If you come out to LA,” Zelonka said, “I can show you.”
I bought a ticket the next day.
“Like Stumbling Into the Drug Business”
My descent into the pandemic PPE trade began with the story of one federal contractor whose failed attempt to find and sell N95 masks in a $34.5 million deal with the VA involved a private jet and the former attorney general of Alabama. The contract was ultimately canceled and referred to the inspector general for investigation.
After the story ran and the federal inquiry began, my social media and email inboxes exploded with messages from people claiming to have giant stockpiles of masks or to know a guy who knows a guy with a stockpile.
Some called me directly, such as a man near Seattle, to ask if I could connect them with the top brass at, say, the Federal Emergency Management Agency. (I told this person that journalists don’t help people with their business dealings, and when I followed up with a series of questions about his alleged stockpile, he cut short the call.)
In reporting on the first VA contractor, I was intrigued and a little tickled that he had been sent a proof-of-life video, cellphone footage that purported to show millions of masks ready to be shipped once the money was wired. It seemed like something out of a spy movie, but the more I talked to people in this world the clearer it became that this was how deals were actually being done.
Bored in my apartment after many weeks of isolation, I began to use the same jargon as insiders when responding to mask entrepreneurs: “Can you show me proof of life?”
On Twitter, a South African sent me a video, apparently shot in China, of boxes of supposed KN95s, the Chinese version of the N95s, which filter out 95% of particles including those that could carry the new coronavirus. A woman held a sheet of paper with his name on it over the boxes to show ownership. Another solicitation included a date-stamped video of a man loading boxes onto a truck.
“Yes my contact has proof of life…I will connect you with my guy,” one contact told me through a Twitter direct message.
The solicitations went on and on.