Staten Island Business Owner Pleads Guilty to Mail Fraud in Scheme to Exploit the COVID-19 Crisis

This afternoon, in federal court in Brooklyn, Kevin J. Lipsitz pleaded guilty before United States District Judge Kiyo A. Matsumoto to mail fraud in connection with his sale of large quantities of personal protective equipment (PPE) at the beginning of the COVID-19 pandemic.  When sentenced, Lipsitz faces up to 20 years in prison, as well as forfeiture, a fine of up to $250,000 and restitution to his victims. 

Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea. 

“With today’s guilty plea, Lipsitz admits to making blatantly false promises and providing fabricated shipping confirmations to thousands of customers who were in urgent need of life-saving PPE,” stated Acting United States Attorney Kasulis.  “This Office will vigorously prosecute defendants who shamelessly seek to profit from an unprecedented national crisis like the COVID-19 pandemic.”

“As our nation was getting its initial glimpse into the COVID-19 Pandemic that was wreaking havoc on our communities and way of life, Kevin Lipsitz took the opportunity to capitalize and profit from people’s fears,” stated HSI Special Agent-in-Charge Fitzhugh.  “Lipsitz advertised and sold PPE at exorbitant prices to vulnerable people who were willing to do almost anything to keep themselves and families safe.  Working with our partners at the United States Attorney’s Office, Eastern District of New York, the FBI, and the U. S. Postal Inspection Service, HSI New York will continue to pursue those in our society who seek to enrich themselves at the expense of those around them.”

“At one of the worse times this country has seen, Mr. Lipsitz devised a scheme to not only price-gouge, but steal from those who needed much sought after PPE supplies. During times of crisis, our citizens must join together for the greater good. His conduct is shameful and he will now pay the price for his greed,” stated USPIS Inspector-in-Charge Bartlett.

According to court filings and facts presented during the plea proceeding, Lipsitz operated SuperGoodDeals.com Inc. (SGD), an online storefront that was based in Staten Island and sold various types of merchandise to customers across the United States.  Between March 2020 and May 2020, as the COVID-19 pandemic swept through the United States, Lipsitz accumulated huge quantities of PPE, including surgical masks and N-95 and KN-95 filtering facepiece respirators.  During that same time period, Lipsitz took advantage of the increased public demand for medical equipment by making false statements to thousands of customers regarding SGD’s inventory and ability to quickly fill and ship orders of PPE.  For example, Lipsitz prominently featured statements on the SGD website that customers could “pay today” and that their orders would “ship tomorrow.”  After customers placed orders relying on these statements, Lipsitz would issue false same-day shipping confirmations, which included tracking numbers that customers could purportedly use to monitor the shipment of their orders.  Despite these promises, Lipsitz did not fulfill orders for PPE on the promised timeline for hundreds of customers.   In addition, Lipsitz further took advantage of the demand for PPE by selling it at large markups, ranging from 150 percent to over 500 percent above what he paid for the goods.

The government’s case is being handled by the Office’s Business & Securities Fraud and International Narcotics & Money Laundering Sections.  Assistant United States Attorneys Julia Nestor and Andrew Wang are in charge of the prosecution.

The Defendant:

KEVIN JAY LIPSITZ
Age:  62
Staten Island, New York

E.D.N.Y. Docket No. 20-CR-394 (KAM)