The Mask Middlemen: How pop-up brokers seek big paydays in a frenzied market

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REUTERS: Brian Kolfage, a Florida military veteran, recently convinced Americans to donate millions of dollars for a privately built wall on the ...

REUTERS: Brian Kolfage, a Florida military veteran, recently convinced Americans to donate millions of dollars for a privately built wall on the US southern border. Now he has jumped into a new venture: hawking millions of protective face masks that are in critically short supply during the coronavirus pandemic.

High-volume deals - even with low-percentage commissions - could bring big paydays for the middlemen. And these brokers could help ease critical shortages if they succeed in encouraging manufacturers and traders sitting on scarce supplies to sell them where they’re needed.But the frenzy also has broken down standard quality controls, opening the market to an influx of masks of uncertain origin and effectiveness, medical suppliers and healthcare industry officials say.

Reuters is aware of prices higher than his, including those that New York Governor Andrew Cuomo recently said had risen from 85 cents to US$7 apiece. A US Department of Justice spokesman declined to comment on the mask trade. The FDA did not comment, except to describe how it has eased some requirements during the crisis and opened the door to sales of masks that meet other countries’ standards.

Chaun Powell, Premier’s vice president of strategic supplier engagement, said some pitches from suppliers, offering masks by the millions of uncertain provenance, have struck the company as highly suspicious. The pitches from mask brokers have poured in at an increasing rate as the shortage has grown critical, Powell said.

One mainstream distributor said that legitimate 3M products also are being diverted out of normal channels by manufacturers or others who want to profit from runaway prices. Kolfage and other brokers told Reuters they are running clean operations. Kolfage said buyers’ funds will be held in escrow by a law firm and the products inspected by an independent verification firm before any transaction closes.The impromptu market thrives on scarcity. Two weeks ago, leaders of a trade group for nursing homes said thousands of their members were about to run out.

Staff members have been forced to go outside their normal supply chains to keep medical gear in stock, according to Adam Jarrett, chief medical officer. In non-emergency situations, manufacturers are required to submit lengthy applications to receive FDA certification, including test results and engineering drawings.

Businessman Paul Bhang, from the Chinese city of Hangzhou, said he recently plunged into the mask sales business with a friend.

 

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