Michigan AG accuses Sheridan-based LLC of false marketing N95 masks
April 16, 2020
SHERIDAN – A Sheridan-based limited liability corporation (LLC) has been accused of falsely marketing what it describes as N95 medical respirator masks, but which may not meet U.S. safety standards; as well as making large profits on these sales.
According to a press release on the state of Michigan's website, that state's Assistant Attorney General, Darrin F. Fowler, sent a cease and desist letter to "Seek Everest LLC," an entity registered in Wyoming through the services of Registered Agents Inc. in Sheridan. The letter was sent April 13.
The cease and desist letter alleges that Seek Everest LLC may be selling counterfeit or otherwise sub-standard N95 respirator masks and making big profits on them during a time of national emergency.
There is no allegation of any wrongdoing whatsoever on the part of Registered Agents Inc.
N95 facial masks are certified by U.S. National Institute of Occupational Safety and Health to provide a level of protection from pathogens (including the novel coronavirus 2019) that masks not meeting the N95 designation may not provide.
According to Fowler's letter, Seek Everest LLC wrote via email a Michigan doctor, an anesthesiologist who works for Sparrow Hospital in Lansing, Michigan, attempting to market masks that may not in fact have been N95 masks, or may not otherwise meet U.S. safety standards.
Seek Everest LLC's website refers interchangeably to N95 and KN95 masks, even claiming "KN95 and N95 masks are the same mask." According to an April 9 document on the website of the U.S. Food and Drug Administration (FDA), KN95 masks are a Chinese version of N95 masks. The FDA did not list KN95 masks in its March 24 Emergency Use Authorization for non-N95 masks because of concerns about counterfeit and defective masks. On April 3, in response to continued mask shortages, the FDA authorized the importation of Chinese-made N95 and KN95 masks, but only if they could be shown to meet U.S. standards.
Fowler's letter describes Seek Everest LLC as a drop-ship operation, using a U.S.-based website to generate orders and payments from U.S. consumers – at a significant mark-up from its actual costs. It alleges that a different company, based in China, ships the actual products.
The company's website sells a box of 10 KN95 masks for close to $55. In contrast, the Home Depot website offers a box of 10 legitimate N95 masks for around $10, though they are currently out of stock.
It is unclear who is actually behind the curtain at Seek Everest LLC. Wyoming's business incorporation laws allow for a great deal of privacy, and in most cases only the names of local Wyoming registered agents may be found in an LLC's incorporating documents and annual reports. The names and addresses of the actual business owners are concealed.
When it comes to foreign companies, this practice may raise eyebrows. A 2011 Reuters news article described Wyoming's popularity as a legal but secretive, even shady base for shell companies of overseas corporations – including many from China. A search of the Wyoming Secretary of State's website reveals that Seek Everest LLC was incorporated by the Sheridan-based registered agent service in December 2018.
Fowler's letter goes on to describe the complaints of many other Michigan consumers about their orders of defective ski clothing and other products from Seek Everest LLCs website.
In the state's press release, Michigan Attorney General Dana Nessel showed outrage. "This business appears to have a poor track record, and now it is potentially putting lives at risk by selling face masks under false pretenses," Nessel said. "This type of behavior is not only unlawful, it's morally reprehensible and it must stop."
The cease and desist letter may be examined here: https://www.michigan.gov/coronavirus/0,9753,7-406-98163-525799--,00.html